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A firm with sales of $10,000 has the following balance sheet: Assets: Accounts Receivable - $2,000 Inventory - $4,000 PPE - $8,000 $14,000 Liabilities &
A firm with sales of $10,000 has the following balance sheet:
Assets:
Accounts Receivable - $2,000
Inventory - $4,000
PPE - $8,000
$14,000
Liabilities & Equity
Accounts Payable - $2,000
Long-term Debt - $6,000
Equity - $6,000
$14,000
It earns 10% on sales and pays no dividends
A) Determine the balance sheet levels of assets and liabilities that vary with sales when sales increase to $15,000
B) How much external funding will the firm need to grow sales to $15,000?
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