1)

Suppose that Wall-E Corp. currently has the balance sheet shown below, and that sales for the year just ended were $6.8 million. The firm also has a profit margin of 25 percent, a retention ratio of 30 percent, and expects sales of $8.8 million next year. Fixed assets are currently fully utilized, and the nature of Wall-Es fixed assets is such that they must be added in $1 million increments.

Assets				Liabilities and Equity
Current assets	$	1,496,000		Current liabilities	$	2,380,000
Fixed assets		4,624,000		Long-term debt		1,600,000
				Equity		2,140,000
Total assets	$	6,120,000		Total liabilities and equity	$	6,120,000

If current assets and current liabilities are expected to grow with sales, what amount of additional funds will Wall-E need from external sources to fund the expected growth? (Enter your answer in dollars not in millions.)

Additional funds needed

$

2)

Suppose that Psy Ops Industries currently has the balance sheet shown below, and that sales for the year just ended were $4.9 million. The firm also has a profit margin of 30 percent, a retention ratio of 20 percent, and expects sales of $7.9 million next year.

Assets				Liabilities and Equity
Current assets	$	1,960,000		Current liabilities	$	2,009,000
Fixed assets		3,950,000		Long-term debt		1,550,000
				Equity		2,351,000
Total assets	$	5,910,000		Total liabilities and equity	$	5,910,000

If fixed assets have enough capacity to cover the increase in sales and all other assets and current liabilities are expected to increase with sales, what amount of additional funds will Psy Ops need from external sources to fund the expected growth? (Enter your answer in dollars not in millions. Negative amount should be indicated by a minus sign.)

Additional funds needed

$