What will be the? firm need for discretionary? financing

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Reference no: EM131359216

Fishing Charter Inc. estimates that it invests ?$0.34 in assets for each dollar of new sales. ? However, ?$0.03 in profits are produced by each dollar of additional? sales, of which ?$0.01 can be reinvested in the firm. If sales rise by ?$300,000 next year from their current level of ?$3 ?million, and the ratio of spontaneous liabilities to sales is 6 ?percent, what will be the? firm's need for discretionary? financing? (Hint?: In this situation you do not know what the? firm's existing level of assets? is, nor do you know how those assets have been financed. ? Thus, you must estimate the change in financing needs and match this change with the expected changes in spontaneous? liabilities, retained? earnings, and other sources of discretionary? financing.)

Reference no: EM131359216

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