Problem:
A firm, which is currently operating at full capacity, has sales of $2,000, current assets of $600, current liabilities of $300, net fixed assets of $1,500, and a 5 percent profit margin. The firm has no long-term debt and does not plan on acquiring any. The firm does not pay any dividends. Sales are expected to increase by 10 percent next year.
Required:
Question: If all assets, liabilities and costs vary directly with sales, how much additional external equity financing is required for next year?
Note: Please answer in proper manner and show all computations