Reference no: EM132555191

Ferrari is expecting to have sales increase next year from $4,000,000 to $5,000,000. They expect accounts receivable, which are currently equal to 54 days sales, and inventories, which turnover 4 times based on sales, to increase proportionately. All other assets are expected to remain at current levels except Plant and Equipment (Fixed Assets) which will require an investment of $150,000. They expect accounts payable, which are currently $600,000, to increase at the same rate as sales. Profits which have been at 5% of sales, are expected to remain at 5% of sales next year. There are no dividends. When ABC projects next year's balance sheet, how much financing will be required to balance their balance sheet? (Use 360 day year.)