Suppose that Wall-E Corp. currently has the balance sheet shown below, and that sales for the year just ended were $7.3 million.
The firm also has a profit margin of 25 percent, a retention ratio of 30 percent, and expects sales of $9.3 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
|
Liabilities and Equity
|
|
Current assets
|
$
|
2,190,000
|
|
Current liabilities
|
$
|
2,409,000
|
|
|
Fixed assets
|
|
5,256,000
|
|
Long-term debt
|
|
1,650,000
|
|
|
|
|
|
Equity
|
|
3,387,000
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
7,446,000
|
|
Total liabilities and equity
|
$
|
7,446,000
|
|
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? (Enter your answer in dollars not in millions.)