Which one is correct answer please confirm?QUESTION 39Getrag expects its sales to increase 20% next year from its current level of $4.7 million. Getrag has current assets of $660,000, net fixed assets of $1.5 million, and current liabilities of $462,000. All assets are expected to grow proportionately with sales. If Getrag has a net profit margin of 10%, what additional financing will be needed to support the increase in sales? Getrag does not pay dividends. a.$339,600 b.No financing needed, surplus of $224,400 c.No financing needed, surplus of $524,400 d.$283,200

The assets and liabilities are presented in the balance sheet of the company whereas, he profit is…

Answered: Getrag expects its sales to increase…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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QUESTION 39

Getrag expects its sales to increase 20% next year from its current level of $4.7 million. Getrag has current assets of $660,000, net fixed assets of $1.5 million, and current liabilities of $462,000. All assets are expected to grow proportionately with sales. If Getrag has a net profit margin of 10%, what additional financing will be needed to support the increase in sales? Getrag does not pay dividends.

a.
$339,600

b.
No financing needed, surplus of $224,400

c.
No financing needed, surplus of $524,400

d.
$283,200

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