How much external funding is required

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Reference no: EM132813954

Problem 1: Woodlawn Company is forecasting sales next year to be $350,000. To accommodate this sales increase, inventory and accounts receivable are expected to increase by $85,000. Woodlawn has a profit margin of 10% and a dividend payout ratio of 35%. Assuming no additional increase in liabilities will occur, how much external funding is required?

Option 1: $62,250
Option 2: $22,750
Option 3: $96,900
Option 4: $85,000

Reference no: EM132813954

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