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Problem 4-6 Calculating Internal Growth [LO3] The most recent financial statements for Schenkel Co. are shown...

Problem 4-6 Calculating Internal Growth [LO3]

The most recent financial statements for Schenkel Co. are shown here:


Income Statement Balance Sheet
  Sales $ 17,600 Current assets $ 10,700 Debt $ 15,200
  Costs 12,000 Fixed assets 25,750 Equity 21,250
  Taxable income $ 5,600     Total $ 36,450     Total $ 36,450
  Taxes (40%) 2,240
    Net income $ 3,360


Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 40 percent dividend payout ratio. No external financing is possible.


What is the internal growth rate? (Do not round intermediate calculations. Enter your answer as a percent rounded 2 decimal places, e.g., 32.16.)


  Internal growth rate %  
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