Provide advice to the management on suitable amount

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Al Rajahi Corporation is enforcing an expansionary policy. The expected expansion in fixed assets is 14%, whereas the projected positive change in NWC is 16%. The total assets in 2020 amounted to $732,000,000. The current liabilities equal 70% of current assets. Current assets are around 40% of TA and FA is 0.5TA. Current liabilities equal to total liabilities. The Corp. is unlikely to issue shares in the capital market and b of 100%, and ROTA of 8%.

Required:

Problem 1: Based on the EFM model, provide advice to the management on suitable amount to raise from the money market and the implications on the balance sheet components.

Reference no: EM132700795

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