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4. Sustainable growth As a firm grows, it must support increases in revenue with new investments in assets. The self-supporting growth model helps a firm assess how rapidly it can grow, while maintaining a balance between its cash outflows (increases in noncash assets) and inflows (funds resulting from increases in liabilities or equity). Consider this case: Blue Elk Manufacturing has no debt in its capital structure and has $200 million in assets. Its sales revenues last year were $100 million with a net income of $5 million. The company distributed $1.35 million as dividends to its shareholders last year. What is the firm's self-supporting, growth rate? (Note: Do not round your intermediate calculations.) 1.86% 3.28% O 0.79% 0.68% Which of the following are assumptions of the self-supporting growth model? Check all that apply. The firm maintains a constant net profit margin. The firm pays no dividends. The firm maintains a constant ratio of liabilities to equity. The firm's liabilities and equity must increase at the same rate. 5. Excess capacity adjustments Three Waters Co. currently has $610,000 in total assets and sales of $1,550,000. Half of Three Waters's total assets come from net fixed assets, and the rest are current assets. The firm expects sales to grow by 19% in the next year. According to the AFN equation, the amount of additional assets required to support this level of sales is $ (Note: Round your answer to the nearest whole number.) Three Waters was using its fixed assets at only 95% of capacity last year. How much sales could the firm have supported last year with its current level of fixed assets? (Note: Round your answer to the nearest whole number.) $1,631,579 $1,468,421 $1,550,000 $1,876,316 When you consider that Three Waters's fixed assets were being underused, its target fixed assets to sales ratio should be %. (Note: Round your answer to two decimal places.) When you consider that Three Waters's fixed assets were being underused, how much fixed assets must Three Waters raise to support its expected sales for next year? (Note: Round your answer to the nearest whole number.) $45,772 $37,812 $39,802 $35,822