AHG Ltd has done a long-term forecast of its balance sheet. The projected total assets for the next year are $250 million. The current liabilities are projected to be $100 million and other long-term liabilities are $100 million. How much net new financing is needed in the following year?
A)$100 million
B)$150 million
C)$20 million
D)$50 million

Question

Quizplus · Accepted Answer

Net new financing needed is calculated as projected total assets minus the sum of current liabilities and other long-term liabilities: $250 million - ($100 million + $100 million) = $50 million.

AHG Ltd Has Done a Long-Term Forecast of Its Balance