Assume the profit margin and dividend payout ratio are constant. By what amount will retained earnings increase if sales are projected to increase by 11 percent? Currently, the firm’s sales =$4,700, net income is $420, total assets=7890, dividends=125, A/P =790, LTD= 3130, and common stock=2780, and retained earnings =1190.

The amount will retained earnings increase if sales are projected to increase by 11 percent is $327,45

Explanation:

In order to calculate the amount will retained earnings increase if sales are projected to increase by 11 percent we would have to make the following calculation:

amount will retained earnings increase=(net income-dividends)*increase percentage

amount will retained earnings increase= ($420-$125)*1.11

amount will retained earnings increase= $ 327.45

The amount will retained earnings increase if sales are projected to increase by 11 percent is $327,45