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Suppose that Wall-E Corporation currently has the balance sheet shown below, and that sales for the year just ended were $7.9 million. The firm also has a profit margin of 25 percent and a retention ratio of 30 percent and expects sales of $9.9 million next year. 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. Assets Current assets $ 2,844,000 Fixed assets Liabilities and Equity 5,214,000 Current liabilities Long-term debt Equity $ 2,133,000 1,950,000 3,975,000 Total assets $ 8,058,000 Total liabilities and equity $ 8,058,000 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? Note: Enter your answer in dollars not in millions. Round your answer to the nearest whole dollar. Additional funds needed

Suppose that Wall-E Corporation currently has the balance sheet shown below, and that sales for the year just ended were $7.9 million. The firm also has a profit margin of 25 percent and a retention ratio of 30 percent and expects sales of $9.9 million next year. 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. Assets Current assets $ 2,844,000 Fixed assets Liabilities and Equity 5,214,000 Current liabilities Long-term debt Equity $ 2,133,000 1,950,000 3,975,000 Total assets $ 8,058,000 Total liabilities and equity $ 8,058,000 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? Note: Enter your answer in dollars not in millions. Round your answer to the nearest whole dollar. Additional funds needed

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Suppose that Wall-E Corporation currently has the balance sheet shown below, and that sales for the year just ended were $7.9 million. The firm also has a profit margin of 25 percent and a retention ratio of 30 percent and expects sales of $9.9 million next year. 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. Assets Current assets $ 2,844,000 Fixed assets Liabilities and Equity 5,214,000 Current liabilities Long-term debt Equity $ 2,133,000 1,950,000 3,975,000 Total assets $ 8,058,000 Total liabilities and equity $ 8,058,000 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? Note: Enter your answer in dollars not in millions. Round your answer to the nearest whole dollar. Additional funds needed
Transcribed Image Text:Suppose that Wall-E Corporation currently has the balance sheet shown below, and that sales for the year just ended were $7.9 million. The firm also has a profit margin of 25 percent and a retention ratio of 30 percent and expects sales of $9.9 million next year. 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. Assets Current assets $ 2,844,000 Fixed assets Liabilities and Equity 5,214,000 Current liabilities Long-term debt Equity $ 2,133,000 1,950,000 3,975,000 Total assets $ 8,058,000 Total liabilities and equity $ 8,058,000 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? Note: Enter your answer in dollars not in millions. Round your answer to the nearest whole dollar. Additional funds needed
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