Axle Supply Co expects sales next year to be $300,000. Inventory and accounts receivable

timer Asked: Feb 11th, 2015

Question Description

I don’t know how to handle this Accounting question and need guidance.

Axle Supply Co expects sales next year to be $300,000.  Inventory and accounts receivable will increase by $60,000 to accommodate this sales level.  The company has a steady profit margin of 10 percent with a 30 percent dividend payout.  How much external financing will the firm have to seek?  Assume there is no increase in liabilities other than that which will occur with the external financing.

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