Reference no: EM133006409

Problem 1: A corporation makes 5 million in sales during 2018 and its year-end total assets are 2.5 million. Also at year-end current liabilities were 1 million, consisting of 300,000 notes payable, 500,000 of accounts payable, and 200,000 of accruals. Looking ahead to 2019 the company estimates that its assets must increase at the same rate as sales, its spontaneous liabilities will increase at the same rate as sales, its profit margin is 7% and its payout ratio is 80%. How large a sales increase can the company achieve without having to raise funds externally? The answer must be a dollar amount.