Problem:
Wagner Industrial Motors, which is currently operating at full capacity, has sales of $2,450, current assets of $790, current liabilities of $480, net fixed assets of $1,640, 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, short-term liabilities, and costs vary directly with sales, how much additional equity financing is required for next year?
- $12.25
- $245.00
- $257.25
- $182.75
- $60.25
Note: Please show guided help with steps and answer.