Delta Mfg Is Currently Operating at Full Capacity

question 180

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:

Transactional Analysis

A psychotherapeutic theory and method exploring the interactions (transactions) between individuals based on the ego states of Parent, Adult, and Child.

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors.

Ego States

Refers to the different facets of our personality that manifest in our behaviors and interactions, such as the Parent, Adult, and Child in transactional analysis.

Transaction

An exchange or interaction between people, which can be financial, emotional, or social.