A company currently has sales of $893,230, a tax rate of 35%, a dividend payout ratio of 43%, and expenses excluding taxes of $759,120

Sales = $893230

Tax rate = 35% or 0.35

Dividend payout ratio = 43% or 0.43

Expenses = $759120

Increasing rate = 9.25% or 0.0925

Solution :-

Expected sales = sales x (1 + increasing rate)

= $893230 x (1 + 0.0925)

= $893230 x 1.0925 = $975853.77

Expected expenses = Expected sales x expenses/sales

= $975853.77 x $759120/$893230 = $829338.59

Expected income = (expected sales - expected expenses) x (1 - tax rate)

= ($975853.77 - $829338.59) x (1 - 0.35)

= $146515.18 x 0.65 = $95234.867

Now,

Anticipated increase to retained earnings = Expected income x (1 - dividend payout ratio)

= $95234.867 x (1 - 0.43)

= $ x 0.57 = $54284