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Elvis Inc. has the following balance sheet: Current assets ...

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Question

Accounting

Elvis Inc. has the following balance sheet:

Current assets

$5,000

Accounts payable

$1,000

Notes payable

1,000

Net fixed assets

5,000

Long-term debt

4,000

Common equity

4,000

Total assets

$10,000

Total liabilities and equity

$10,000

Business has been slow; therefore, fixed assets are vastly underutilized. Management believes it can triple sales next year with the introduction of a new product. No new fixed assets will be required, and management expects that there will be no earnings retained next year. What is next year's additional financing requirement?

A. a. $3,500

B. b. $4,600

C. c. $5,900

D. d. $8,000 (Doubled Asset side & AC Payable & Notes Payable, 20000 - 12000 = 8000)

E. e. $10,000

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