Answer:
The external financing needed is $248.50
Explanation:
For computing the external financing needed, first we have to find out the increase percentage of sales which is shown below:
As the given sales is $8,300 and projected sales is $9,545
So, the increase in percentage = (Projected sales - given sales) ÷ given sales × 100
= ($9,545 - $8,300) ÷ 8,300 × 100
= 15%
Now the projected net income equals to
= Projected sales - projected cost
= $9,545 - $6,313.50
= $3,231.50
The projected cost is computed below
= Cost + (cost × increase in percentage of sales)
= ($5,490 + $5,490 × 15%)
= $6,313.50
It is given that the assets and costs are proportional to sales,
So, the new asset value is = Assets + Assets × increase percentage of sales
= $23,200 + $23,200 × 15%
= $23,200 + $3,480
= $26,680
And, the equity value = Equity + net income
= $14,200 + $3,231.50
= $17,431.50
Plus, the debt is $9,000
The liabilities side = $17,431.50 + $9,000 = $26,431.50
So, the difference would be
= Asset - Liabilities
= $26,680 - $26,431.50
= $248.50
