6. Builtrite projects that its sales next year will be $20 million. Current sales are $15 million with current assets equal to $5 million and fixed assets also equal to $5 million. Builtrites net profit margin is 5%. Builtrite forecasts that its current assets will increase in direct proportion to its increase in sales and that its fixed assets will increase by $100,000. Currently, Builtrite has $1.5 million in accounts payable (which will also vary directly with sales), $2 million in long term debt and common equity (common stock and retained earnings) of $6.5 million. Builtrite is planning on paying a dividend of $500,000 to its common stockholders next year.

a) What are Builtrites total asset needs for the coming year?

b) Given Builtrites projections and dividend payment plans, what are its discretionary financing needs for the coming year?

c) Based on Builtrites balance sheet projections, what is the largest increase in sales that they can support without having to use discretionary sources of financing?

Please show all calculations and formulas used