Bondage Supply Company expects sales next year to be $750,000

Subject: Business    / Finance
Question

Bondage Supply Company expects sales next year to be $750,000. Inventory and accounts receivable will have to be increased by $120,000 to accommodate this sales level. The company has a steady profit margin of 10 percent, with a 30 percent dividend payout.

How much external funding will Bondage Supply Company have to seek? Assume there is no increase in liabilities other than that which will occur with the external financing.