Assume that a company earns 280,000 in profit for the year on3 million in revenue. The board of directors decides to keep half to pay for dividends and to reinvest the rest in the company. Sixty percent of the retained earnings are invested in non-current assets and the rest, in working capital for growth. Calculate, as a percentage of revenue, how much would be kept in the company for growth (i.e., working capital and non-current assets) and how much would be used to pay dividends?
1) 40% for growth and 50% for dividends
2) 50% for growth and 50% for dividends
3) 60% for growth and 40% for dividends
4) 40% for growth and 60% for dividends