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Suppose that Wind Em Corp. currently has the balance sheet shown below, and that sales for the year just ended were $6.4 million. The firm
Suppose that Wind Em Corp. currently has the balance sheet shown below, and that sales for the year just ended were $6.4 million. The firm also has a profit margin of 20 percent, a retention ratio of 25 percent, and expects sales of $7.4 million next year. |
Assets | Liabilities and Equity | ||||||
Current assets | $ | 1,616,000 | Current liabilities | $ | 1,804,800 | ||
Fixed assets | 4,400,000 | Long-term debt | 1,800,000 | ||||
Equity | 2,411,200 | ||||||
Total assets | $ | 6,016,000 | Total liabilities and equity | $ | 6,016,000 | ||
If all assets and current liabilities are expected to grow with sales, what amount of additional funds will Wind Em need from external sources to fund the expected growth? |
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