Suppose that Wall-E Corp. currently has the following balance sheet, and that sales for the year just ended were $7 million. The firm also has a profit margin of 27 percent, a retention ratio of 20 percent, and expects sales of $9 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. 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 expectedgrowth?

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Assets Liabiliies and Equity Current assets $2,000,000 Current liabilities Fixed assets 5,000,000 Long-term debt $2,500,000 1,500,000 3,000,000 7,000,000 Total liabilities and equity $7,000,000 Equity Total assets