A firm has current assets of $200, net fixed assets of $400, accounts payable of $150, long-term

Question:

A firm has current assets of $200, net fixed assets of $400, of $150, long-term debt of $150, equity of $300, sales of $2,000, costs of $1,500, and a tax rate of 34 percent. Assume costs and assets increase at the same rate as sales. Also assume that 40 percent of net income is retained. The current debt-equity ratio is considered optimal and no new equity sales are possible. What is the maximum rate of growth given this information?
a) 17.5 percent
b) 19.4 percent
c) 21.4 percent
d) 25.8 percent

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...