Rodeo Supply Company is planning to increase its sales by 20% next year. The sales increase will require a total additional investment in receivables, inventory, and fixed assets of 450,000. Increases in liabilities such as accounts payable and other accruals will supply 75,000 of financing. Rodeo also expects total profits of 300,000 next year and will not pay any cash dividends. How much external financing is required to finance the sales increase?
Multiple choice are:
$300,000
-$225,000
-$75,000
$75,000
$150,000
$225,000
$300,000
$450,000
$825,000