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# Item 3 25 points Assume the following ratios are constant: Total asset turnover 2 Profit margin 5.3 % Equity multiplier 1.

Item 3 25 points

Assume the following ratios are constant:

Total asset turnover

2

Profit margin

5.3

%

Equity multiplier

1.3

Payout ratio

30

%

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

Sustainable growth rate         %

Item 4 25 points

Prepare a 2017 balance sheet for Jarrow Corp. based on the following information: cash = \$137,000; patents and copyrights = \$630,000; accounts payable = \$216,000; accounts receivable = \$130,000; tangible net fixed assets = \$1,645,000; inventory = \$298,000; notes payable = \$150,000; accumulated retained earnings = \$1,258,000; long-term debt = \$855,000. (Do not round intermediate calculations. Be sure to list the accounts in order of their liquidity.)

JARROW CORP.

Balance Sheet

Assets

\$

Current assets

\$

Total assets

\$

Liabilities & Equity

\$

Current liabilities

\$

Total liabilities

\$

Total liabilities & owners' equity

\$

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