Suppose that Gyp Sum Industries currently has the following balance sheet, and that sales for the year just ended were $10 million. The firm also has a profit margin of 25 percent, a retention ratio of 30 percent, and expects sales of $8 million next year. If all assets and current liabilities are expected to shrink with sales, what amount of additional funds will Gyp Sum need from external sources to fund the expected growth?

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Assets Liabilities and Equity Current assets $2,000,000 Current liabilities $1,500,000 1,500,000 3,000,000 $6,000,000 Fixed assets 4,000,000 Long-term debt Equity Total liabilities and equity Total assets $6,000,000