Question
Elvis Inc. has the following balance sheet: Current assets $5,000 Accounts payable$1,000 Notes payable 1,000 Net fixed assets 5,000 Long-term debt 4,000 Common equity 4,000
Elvis Inc. has the following balance sheet: Current assets $5,000
Accounts payable$1,000
Notes payable 1,000
Net fixed assets 5,000
Long-term debt 4,000
Common equity 4,000
Total assets $10,000
Total liabilities and equity $10,000
Business has been slow; therefore, fixed assets are vastly underutilized. Management believes it can triple sales next year with the introduction of a new product. No new fixed assets will be required, and management expects that there will be no earnings retained next year. What is next year's additional financing requirement?
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Practical Financial Management
Authors: William R. Lasher
6th Edition
1439080496, 978-1439080498
