Wagner Industrial Motors,which Is Currently Operating at Full Capacity,has Sales

question 29

Multiple Choice

Wagner Industrial Motors,which is currently operating at full capacity,has sales of $29,000,current assets of $1,600,current liabilities of $1,200,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 4.5 percent next year.If all assets,short-term liabilities,and costs vary directly with sales,how much additional equity financing is required for next year?

• A)-$259.75
• B)-$201.19
• C)$967.30
• D)$1,099.08
• E)$1,515.25

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