Question
Suppose tat Wall-E Corp., currently has the balance sheet shown below, and that sales for the year just ended were $7.1 million. The firm also
Suppose tat Wall-E Corp., currently has the balance sheet shown below, and that sales for the year just ended were $7.1 million. The firm also has a profit margin of 20 percent, a retention ratio of 25 percent and expects sales of $9.1 million next year. Fixed assets are assets is such that they must be added in $1 million increments. If current assets and current liabilities are expected to grow with sales, what amount of additional funds will Wall-E need from external sources to fund the expected growth? Fixed assets are currently fully utilized, and the nature of Wall-E's fixed assets is such that they must be added in $1 million increments. I keep getting 805,000. what am I doing wrong?
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