Suppose That Runner Industries Currently Has the Balance Sheet Shown

question 56

Multiple Choice

Suppose that Runner Industries currently has the balance sheet shown below, and that sales for the year just ended were $5 million. The firm also has a profit margin of 10 percent, a retention ratio of 20 percent, and expects sales of $7 million next year. If fixed assets have enough capacity to cover the increase in sales and all other assets and current liabilities are expected to increase with sales, what amount of additional funds will the company need from external sources to fund the expected growth?

• A) $0
• B) $140,000
• C) $220,000
• D) $180,000

Analyze the impact of price discrimination in monopolistic markets.

Understand the concept of economies of scale and its role in creating monopolies.

Recognize the relationship between demand, marginal revenue, and total revenue in monopolistic markets.

Explain the role of patents, licenses, and government regulations as mechanisms to sustain monopolies.