BBP, Inc., with sales of $500,000, has the following balance sheet:
The firm earns 15 percent on sales and distributes 25 percent of its earnings. Using the percent of sales, forecast the new balance sheet for sales of $600,000 assuming that cash changes with sales and that the firm is not operating at capacity. Will the firm need external funds? Would your answer be different if the firm distributed all of its earnings?
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