Problem:

Wagner Industrial Motors, which is currently operating at full capacity, has sales of $29,000, current assets of $1,600, current liabilities of $1,350, net fixed assets of $27,500, and a 5 percent profit margin. The firm has no long-term debt and does not plan on acquiring any. The firm does not pay any dividends. Sales are expected to increase by 3.5 percent next year.

Required:

Question: If all assets, short-term liabilities, and costs vary directly with sales, how much additional equity financing is required for next year?

Note: Please show guided help with steps and answer.