What amount of additional funds will wall-e need

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Reference no: EM132019620

Suppose that Wall-E Corp. currently has the balance sheet shown below, and that sales for the year just ended were $6.6 million.

The firm also has a profit margin of 30 percent, a retention ratio of 20 percent, and expects sales of $8.6 million next year.

Fixed assets are currently fully utilized, and the nature of Wall-E's fixed assets is such that they must be added in $1 million increments.

Assets			Liabilities and Equity
Current assets	$	1,584,000	Current liabilities	$	2,178,000
Fixed assets		4,356,000	Long-term debt		1,700,000
			Equity		2,062,000

Total assets	$	5,940,000	Total liabilities and equity	$	5,940,000

If current assets and current liabilities are expected to grow with sales, what amount of additional funds will Wall-E need from external sources to fund the expected growth? (Enter your answer in dollars not in millions.)

Reference no: EM132019620

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