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

Question

Quizplus · Accepted Answer

The Answer of 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

Delta Mfg Is Currently Operating at Full Capacity