King County Enterprises Projects That It Will Need $100 Million

question 59

Multiple Choice

King County Enterprises projects that it will need $100 million in total assets to meet the sales projection of $130 million.The pro forma balance sheet shows accounts payable of $16 million, accrued expenses of $4 million, long-term debt of $20 million and equity of $65 million.If King decides to meet discretionary financing needs with five-year notes payable, how much will it need to borrow?

• A)$20 million
• B)$0, the firm has excess funds
• C)$10 million
• D)Cannot be calculated without knowing the net profit margin.

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