Find forecasted sales growth

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Reference no: EM133061937

The management of Glenview Ltd. is preparing its budget for next year. Marketing expects sales to grow by 20% to $3.5 million.  The company is operating at full capacity, and net assets are expected to grow proportionally with sales.  Glenview's profit margin has been stable at 8.2%.  The company's dividend policy is to payout 25% of profits to shareholders.

Glenview's Balance Sheet

Cash

 175,000

Accounts Payable

 262,000

Accounts Receivable

 350,000

Notes Payable

 113,000

Inventories

 350,000

Accruals

 150,000

Fixed Assets

 875,000

Long term debt

 700,000

 

 

Total Liabilities

 1,225,000

 

 

 

 

 

 

Common Equity

 88,000

 

 

Retained Earnings

 437,000

 

 

Total Equity

 525,000

 

 

 

 

TOTAL ASSETS

 1,750,000

Total Liabilities & Equity

 1,750,000

  1. How much does Glenview need to borrow to support this forecasted sales growth? Show all work and explain your answer.

Reference no: EM133061937

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