Delta Mfg Is Currently Operating at Full Capacity

question 24

Multiple Choice

Delta Mfg. is currently operating at full capacity. The firm has sales of $89,600, current assets of $32,000, current liabilities of $23,600, net fixed assets of $41,500, and a 5% 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 5% next year. If all assets, current liabilities, and costs vary directly with sales, how much additional equity financing is required for next year?

• A) -$2,209
• B) $189
• C) $2,495
• D) $2,620
• E) $4,704

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Definitions:

Altruistic Goals

Objectives aimed at benefiting others without expecting personal gain, reflecting selflessness and concern for the well-being of others.

Material Interests

Concerns or priorities based on tangible resources, assets, and physical or economic well-being rather than abstract or spiritual factors.

Physical Maturation

The biological growth processes that enable orderly changes in behavior, mostly independent of the environment but influenced by it.

Emotional Turbulence

Intense, rapidly changing, or conflicting feelings and emotions.