In the spring of 2013 the Caswell publishing company established a custom publishing business for business clients. These clients consisted principally of small to medium size companies in Round Rock Texas. However the companys plans were disrupted when they landed a large printing contract from Dell computers that they expected would run for several years. Specifically the new contract increased firm revenues by 100%. Consequently, Caswells management new they would need to make some significant changes in Firm capacity. The following balance sheet for 2013 and pro forma balance sheet for 2014 reflect the firms estimates of the financial impact of the 100% revenue growth.

Caswell Publishing Co.		Caswell Publishing Co.
Balance Sheet for 2010		Pro Forma Balance Sheet for 2011	100%
Current assets	11,990,000	Current assets	23,980,000
Net fixed assets	17,990,000	Net fixed assets	35,980,000
Total	29,980,000	Total	59,960,000
Accounts payable	2,030,000	Accounts payable	4,060,000
Accrued expenses	1,930,000	Accrued expenses	3,860,000
Notes payable	1,520,000	Notes payable	1,520,000
Current liabilities	5,480,000	Current liabilities	9,440,000
Long-term debt	6,570,000	Long-term debt	6,570,000
Total liabilities	12,050,000	Total liabilities	16,010,000
Common stock (par)	950,000	Common stock (par)	950,000
Paid-in-capital	1,980,000	Paid-in-capital	1,980,000
Retained earnings	15,000,000	Retained earnings	15,000,000
Common equity	17,930,000	Common equity	17,930,000
Total	29,980,000	Projected sources of financing	33,940,000
		Discretionary financing needs
		Total financing needs=Total assets

a. How much new discretionary financing will Caswell require based on the above estimates?

The discretionary financing needs (DFN) are?

b. Given the nature of the new contract and the specific needs for financing that the firm expects, what recommendations might you offer to the firms CFO as to specific sources of financing the firm should seek to fulfill its DFN? (Select all the choices that apply)

Sales of fixed assets

Retained earnings

Long-term debt

Common Stock

Notes Payable