What is next years additional funding requirement

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Reference no: EM131789708

Problem A:

United Products Inc. has the following balance sheet:

Current assets

$5,000

Accounts payable

$1,000

 

 

Notes payable

1,000

Net fixed assets

5,000

Long-term debt

4,000

 

 

Common equity

4,000

Total assets

$10,000

Total liabilities and equity

$10,000

Business has been slow; therefore, fixed assets are vastly underutilized. Management believes it can double sales next year with the introduction of a new product. No new fixed assets will be required, and management expects that there will be no earnings retained next year. What is next year's additional funding requirement?

Reference no: EM131789708

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