[momneedinghelp]

Electric Chair and Table Co. expects sales next year to be $10,000,000. Inventory
And accounts receivable will increase by $1,400,000 and accounts payable will
Increase by $300,000. The company has a profit margin of 9 percent and pays
Out 30 percent of profits in dividends. How much external financing will be nec-
Essary? Assume there is no increase in liabilities other than that which will occur
With the external financing.
Could someone tell me how to solve this problem?

[haider78605]

The answer has been given which is $1070000

[haider78605]

sorry see the revised answer earlier I took 1400000 as account receivable and 300000 as inventory instead of account payable see the revised answer
Account receivables and inventory = 1400000
less account payable = 300000
less profit retained =630000
net requirement = 470000