Suppose that PBJ Industries, Inc. currently has the balance sheet shown as follows, and that sales for the year just ended were $10 million. The firm also has a profit margin of 10 percent, a retention ratio of 25 percent, and expects sales of $12 million next year. If all assets and current liabilities are expected to increase with sales, what amount of additional funds will the company need from external sources to fund the expected growth?

Assets		Liabilities and Equity
Current Assets	1,000,000	Current Liabilities	1,000,000
Fixed Assets	2,000,000	Long-Term Debt	1,000,000
		Equity	1,000,000
Total Assets	3,000,000	Total Liab & Equity	3,000,000

Multiple Choice:

A $0

B $6,250

C $30,000

D $100,000