Question
Computer Inc. generated $5 million in sales this year with assets equal to $14 million. The company operated at full capacity. Computer Inc's balance sheet
Computer Inc. generated $5 million in sales this year with assets equal to $14 million. The company operated at full capacity. Computer Inc's balance sheet indicates the only current liabilities are accounts payable and accruals, which equal $1.2 million in combination. Other liabilities include long-term debt, which equals $5 million, and common equity, which is comprised of 150,000 shares of common stock with a book value equal to $7 million and $800,000 of retained earnings. Next year, Computer Inc. forecasts its sales will increase by 8 percent. The companys net profit margin is expected to remain at its current level, which equals 15 percent of sales. If Computer Inc. plans to pay dividends equal to $1.40 per share, estimate the additional funds needed to achieve its forecasted sales next year.
324,000
424,000
520,000
680,000
1,120,000
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