(Related to Checkpoint17.1)(Discretionary financingneeds)In the spring of 2013 the Caswell Publishing Company established a custom publishing business for its business clients. These clients consisted principally ofsmall- tomedium-size companies in RoundRock, Texas. However, thecompany's plans were disrupted when they landed a large printing contract from Dell Computers Corp.(DELL) that they expected would run for several years. Specifically, the new contract would increase firm revenues by 100 percent. Consequently, Caswell's management knew they would need to make some significant changes in firmcapacity, and quickly. The following balance sheet for 2013 and pro forma balance sheet for 2014 reflect thefirm's estimates of the financial impact of the 100 percent revenuegrowth:

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

b.Given the nature of the new contract and the specific needs for financing that the firmexpects, what recommendations might you offer to thefirm's CFO as to specific sources of financing the firm should seek to fulfill itsDFN?

a. The discretionary financing needs are $----- (Round to the nearestdollar.)

b.Given the nature of the new contract and the specific needs for financing that the firmexpects, what recommendations might you offer to thefirm's chief financial officer as to specific sources of financing the firm should seek to fulfill itsDFN? (Select all the choices that applybelow.)

A.

Notes payable.

B.

Retained earnings.

C.

Sale of fixed assets.

D.

Long-term debt.

E.

Common stock.