Sales is expected to be carried out without any expansion

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Upton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, and ships them to its chain of retail stores. Upton's balance sheet as of Dec. 31, 2006, is shown here (millions of dollars):

Cash $ 3.5 A/P $ 9.0
A/R 26.0 NP 18.0
Inv. 58.0 Accruals 8.5
Total CA 87.5 Total CL 35.5
FA 35.0 Mortgage Loan 6.0
TA $122.5 Common Stock 15.0
R.E. 66.0
TL + TE 122.5

Sales for 2006 were $350 million, while net income for the year was $10.5 million. Upton paid dividends of $4.2 million to common stockholders. The firm is operating at full capacity. Assume that all ratios remain constant.

if sales are projected to increase by $70 million, or 20%, during 2007

Determine Upton's projected external capital requirement if the increase in sales is expected to be carried out without any expansion of fixed assets.

Reference no: EM13242630

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