Current assets	90,000		Current liabilities	55,000
Plant and equipment, net	100,000		Long-term liabilities	35,000
			Common shares	40,000
			Retained earnings	60,000
Total assets	190,000		Total liabilities and equity	190,000

.

A. Use the "Percentage of sales" method to determining the external financing required assuming the company has sufficient plant capacity

to handle the increase in sales volume

Increase In RE=

RNF=

B. Assume that company do not have excess capacity and would require a similar percentage increase in net plant and equipment to accomodate the net increase in volume. Calculate external financing required.

RNF=

C.

C. Assume instead that the company does not have excess capacity and would require a $10,000 increase in net plant and equipment to accommodate the volume increase. Compute the external financing required.

RNF=