Sales increase can be handled by existing fixed assets

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Reference no: EM131255372

Austin Boston corporation's balance sheet for last year is present below:

Cash $ 400,000 Accounts payable $1,500,000

accounts receivable 2,000,000 Notes payable 1,000,000

Inventory 3,000,000 Mortgage 2,500,000

Fixed assets 3,600,000 Common stock 2,500,000

Retained earnings 1,500,000

Total Assets $9,000,000 Total liabilities & equity $9,000,000

Sales last year were $10,000,000 and they are expected to increase by 20 percent next year. Net profit margin is forecasted to be 8%. Austin Boston plans to pay dividends of 60%. Management expects that the sales increase can be handled by existing fixed assets. How much external funds does Austin Boston need next year?

Reference no: EM131255372

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