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Question
Following is the balance sheet of Cyan Inc.:
Current assets $ 5,000 Accounts payable $ 1,000
Net fixed assets 10,000 Accruals 1,000
Long-term debt 5,000
Common equity 8,000
Total $15,000 Total $15,000
Cyan currently is operating at full capacity. Next year, the firm expects sales to increase by 50 percent. It also expects to retain $2,000 of next year's earnings to invest in additional fixed assets. What will be Cyan's additional funds needed (AFN) next year?
a. No additional funds are required.
b. $1,000
c. $4,500
d. $4,000
e. $6,500
Answer
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