Ask Question
BusinessBusiness
7 February, 03:10

Mirrlees Furniture earned $750,000 last year and had a 30% payout ratio. How much did the firm add to its retained earnings?

+5
Answers (1)
  1. 7 February, 04:09
    0
    It is $525,000.

    Explanation:

    If the payout ratio is 30%, then retention rate will be 70%

    Additional Retention = $750,000 * 70%

    =$525,000

    Additional amount retained can be used for future business expansion and can also be used to buy back shares provided there is no available profitable investment project to invest in.

    Here, the retention rate is very high which implies that the company has prospective investment to put the money into to generate additional returns.

    Investors will therefore settle for capital appreciation resulting from increase in share price as result of additional earnings from profit plouged back into the business.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Mirrlees Furniture earned $750,000 last year and had a 30% payout ratio. How much did the firm add to its retained earnings? ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Grace Co. can further process Product B to produce Product C. Product B is currently selling for $21 per pound and costs $14 per pound to produce.
Answers (1)
In a relationship between an employee and supervisor, who must do most of the adjusting? A. Both must adjust equally. B. Neither has to adjust at all. C. The supervisor must adjust. D. The employee must adjust
Answers (1)
The payout ratio is computed by dividing a. dividends paid per share by net income. b. total cash dividends paid to common stockholders by retained earnings. c. total cash dividends paid to common stockholders by net income. d.
Answers (1)
Sally Company manufactures large kitchen appliances. For the first year of purchase, the company will repair any manufacturing defect free of charge. Sally apparently sells its appliances with a (n). (Enter one word per blank)
Answers (1)
You are the production manager of an electronics company and learn from the marketing manager that there is an unexpected high demand for your new product.
Answers (1)
New Questions in Business
A firm supplies aircraft engines to the government and to private firms. It must decide between two mutually exclusive contracts. If it contracts with a private firm, its profit will be $2 million, $1 million, or - $1 million with probabilities. 25,.
Answers (1)
Important business data that is not known to the public is considered what type of information?
Answers (1)
On january 1, applied technologies corporation (atc) issued $510,000 in bonds that mature in 10 years. the bonds have a stated interest rate of 8 percent. when the bonds were issued, the market interest rate was 8 percent.
Answers (1)
What is strategy implementation what questions must strategy makers consider to begin the imlimentation process?
Answers (1)
Suppose that due to a poor economy, 1 million workers lost their jobs, causing the unemployment rate to increase to 10%. After a few months of searching, 300,000 of these unemployed workers give up looking for work.
Answers (1)
Home » Business » Mirrlees Furniture earned $750,000 last year and had a 30% payout ratio. How much did the firm add to its retained earnings?
Sign Up Forgot Password?