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A firm has current sales of $42,000. Projected sales for next year are $44,000. The percentage of sales approach is used for pro forma purposes.
A firm has current sales of $42,000. Projected sales for next year are $44,000. The percentage of sales approach is used for pro forma purposes. All balance sheet accounts, except long-term debt and common stock, change according to that approach. The expected increase in retained earnings is $2,500. What is the projected external financing need given the following current account values?
Current assets | $ | 11,000 |
Net fixed assets | $ | 25,000 |
Current liabilities | $ | 5,600 |
Long-term debt | $ | 10,500 |
Common stock | $ | 4,500 |
Retained earnings | $ | 10,500 |
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