Question
A companys assets consist of $100,000 of cash, $200,000 of accounts receivable, $300,000 of inventory, and $800,000 of plant. Its liabilities consist of $100,000 of
A companys assets consist of $100,000 of cash, $200,000 of accounts receivable, $300,000 of inventory, and $800,000 of plant. Its liabilities consist of $100,000 of accounts payable and $600,000 of long-term debt. Its equity consists of $450,000 of common stock and $250,000 of retained earnings.
The companys sales last year were $1,400,000, its profit margin was 3.2%, its earnings retention ratio was 40%, and it operated at 70% of capacity. If the companys sales are expected to increase by 15% this year, what amount of additional funds does the company need?
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