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Lullaby Lane Bedding, Inc

Question 20

Multiple Choice

Lullaby Lane Bedding, Inc. needs to determine the amount of growth the firm could experience without having to obtain external financing. The current sales level is $800,000, the net profit margin is 6%, and the dividend payout ratio is 40%. Assume the firm is currently operating at full capacity and all assets will increase proportionately with sales. Lane's current balance sheet follows: Lullaby Lane Bedding, Inc. needs to determine the amount of growth the firm could experience without having to obtain external financing. The current sales level is $800,000, the net profit margin is 6%, and the dividend payout ratio is 40%. Assume the firm is currently operating at full capacity and all assets will increase proportionately with sales. Lane's current balance sheet follows: A) 6.53% B) 1.09% C) 11.97% D) 13.50%


A) 6.53%
B) 1.09%
C) 11.97%
D) 13.50%

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