Paraiso Corporation is considering its funding requirements for next year and anticipates that the operating expenses, current assets, fixed assets, and current debts will remain relative to their current proportion of sales. Last year Paraiso Corp. had $ 12MM in sales, a net income ( Net Income) of $ 1.2MM, and anticipates that for next year its sales will be $ 15MM with a net profit of $ 2MM. The corporation retains its earnings to pay for your new investments. Estimate the financing requirements (total assets) of Paraiso Corporation and its net requirements funding (discretionary financing needed) for the year 2017.

* N / A- This figure does not vary directly with sales and is assumed to remain constant for the purpose of forecasting next year's financial needs.

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Current assets $3,000,000 25% Fixed assets 6,000,000 fifty% Total Assets $ 9,000,000 Liabilities & Equity Debts to pay $ 3,000,000 25% Long term debts 2,000,000 N/A* Toltal of liabilities $ 5,000,000 Common actions 2,800,000 N/A* Retained earnings 1,200,000 Net equity 4,000,000 Total Liabilities & Equity $ 9,000,000 Current assets $3,000,000 25% Fixed assets 6,000,000 fifty% Total Assets $ 9,000,000 Liabilities & Equity Debts to pay $ 3,000,000 25% Long term debts 2,000,000 N/A* Toltal of liabilities $ 5,000,000 Common actions 2,800,000 N/A* Retained earnings 1,200,000 Net equity 4,000,000 Total Liabilities & Equity $ 9,000,000

Answer rating: 100% (QA)

Discretionary financing needs Projected total assets liabilities owners equity Cu... View the full answer