Evaluate the amount of new funds

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Reference no: EM1316548

Calculation of additional funds needed.

The following is the balance sheet for 2003 for Marbell Inc.

	Marbell Inc.
	Balance Sheet
	12/31/2003
Assets		Liabilities and Stockholders' Equity
Cash	$15,000	Accts. Payable	$90,000
Accts. Rec.	90,000	Notes payable (non-spontaneous)	30,000
Inventory	60,000	Accrued expenses	7,500
Current Assets	165,000	Current Liabilities	127,500
Fixed assets (non-spontaneous)	60,000	Common stock	75,000
		Retained earnings	22,500
Total assets	$225,000	Total Liabilities + S. E. Equity	$225,000

Sales for 2002 were $300,000. Sales for 2003 have been projected to increase by 20%. Assuming that Marbell Inc. is operating below capacity, calculate the amount of new funds required to finance this growth. Marbell has an 8% return on sales and 70% is paid out as dividends.

Reference no: EM1316548

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