How much external financing is required by ttt next year

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TTT Inc has current sales of $40 million. Sales are expected to grow to $65 million next year. TTT currently has accounts receivable of $25 million, inventories of $10 million, and the net fixed assets of $30 million. These assets are expected to grow at the same rate as sales over the next year. Accounts payable are expected to increase from their current level of $15 million to a new level of $22 million next year. TTT wants to increase its cash balance at the end of next year by $5 million. Earnings after taxes next year are forecasted to be $12 million. Next year, TTT plans to pay dividends of $1.5 million. How much external financing is required by TTT next year?

a. $28.125 million
b. $18.125 million
c. $16.375 million
d. $8.375 million

 

Reference no: EM13271938

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