Suppose that Wind Em Corp. currently has the balance sheet shown below, and that sales for the year just ended were $12 million. The firm also has a profit margin of 20 percent, a retention ratio of 30 percent, and expects sales of $22 million next year. If all assets and current liabilities are expected to grow with sales, what is the necessary increase in assets?
A) $6,240,000
B) $6,333,333.33
C) $8,333,333.33
D) $4,833,000

Question

Suppose that Wind Em Corp. currently has the balance sheet shown below, and that sales for the year just ended were $12 million. The firm also has a profit margin of 20 percent, a retention ratio of 30 percent, and expects sales of $22 million next year. If all assets and current liabilities are expected to grow with sales, what is the necessary increase in assets? 
A) $6,240,000 
B) $6,333,333.33 
C) $8,333,333.33 
D) $4,833,000

Quizplus · Accepted Answer

The Answer of Suppose that Wind Em Corp. currently has the balance sheet shown below, and that sales for the year just ended were $12 million. The firm also has a profit margin of 20 percent, a retention ratio of 30 percent, and expects sales of $22 million next year. If all assets and current liabilities are expected to grow with sales, what is the necessary increase in assets? 
A) $6,240,000 
B) $6,333,333.33 
C) $8,333,333.33 
D) $4,833,000

Suppose That Wind Em Corp