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Question: Wagner Industrial Motors, which is currently operating at full capacity, has sales of $2,290, current assets of $630, current liabilities of $320, net fixed assts of $1,480, 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 10 percent next year. If all assets, short-term liabilities, and cost vary directly with sales, how much additional equity financing is required for next year? Compute one by one and answer the following questions:

A. Current total equity

B. Projected assets

C. Projected liabilities

D. Projected increase in retained earning (equity)

E. Equity funding need

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M92572173

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