Suppose That Wind Em Corp

question 76

Multiple Choice

Suppose that Wind Em Corp.currently has the balance sheet shown as follows,and that sales for the year just ended were $15 million.The firm also has a profit margin of 23 percent,a retention ratio of 40 percent,and expects sales of $20 million next year.If all assets and current liabilities are expected to grow with sales,what is the necessary increase in assets?

• A)$240,000
• B)$3,333,333.33
• C)$1,366,957.14
• D)$1,840,000

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Definitions:

Consumer Surplus

The gap between the total sum consumers are ready and able to spend on a good or service, and the sum they actually do spend.

Market Equilibrium

The condition in which the quantity of a product supplied is equal to the quantity demanded, leading to a stable market price.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to sell.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers.