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ABC Corporation expects sales next year to be $50,000,000. Inventory and accounts receivable (combined) will increase $8,000,000 to accommodate this sales level. The company has
ABC Corporation expects sales next year to be $50,000,000. Inventory and accounts receivable (combined) will increase $8,000,000 to accommodate this sales level. The company has a profit margin of 6 percent. Its dividend pay-out is 30 percent of profit. How much external financing will the firm have to seek? Assume there is no increase in liabilities other than that which will occur with the external financing.
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