B. Mencias Corp. is evaluating its financing requirements for the coming year, 2023. The CFO predicts that the firm'soperating expenses, current assets, net fixed assets, and current liabilities will remain at their current proportion of sales.Last year (2022) Mencias Corp. had $12 million in sales with net income of $1.5 million. The firm anticipates that next year'ssales will reach $17 million with net income rising to $2.125 million. Given its present high rate of growth, the firm retains allof its earnings to help defray the cost of new investments. The firm's balance sheet for the year just ended is as follows:Balance Sheet2022% of SalesCurrent assets$3,000,00025%Net fixed assets$6,000,00050%Total Assets$9,000,000Liabilities and Owners' EquityAccounts payable$3,000,00025%$2,000,000ΝΑLong-term debtTotal liabilities$5,000,000Common stock$1,000,000Paid-in capital$1,500,000Retained earnings.$1,500,000Common equity$4,000,000Total$9,000,000NANA i) Estimate Mencias Corp. total financing requirements (total assets).ii)What is Mencias Corp. net funding requirements (discretionary financing needed) for 2022?

Introduction: Total assets are the total amount of assets owned by an individual or entity. An asset…

Answered: i) Estimate Mencias Corp. total…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter4: Financial Planning And Forecasting

Section: Chapter Questions

Problem 9P

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i) Estimate Mencias Corp. total financing requirements (total assets). ii) What is Mencias Corp. net funding requirements (discretionary financing needed) for 2022?