Urban's, Which Is Currently Operating at Full Capacity, Has Sales

Multiple Choice

Urban's, which is currently operating at full capacity, has sales of $47,000, current assets of $5,100, current liabilities of $6,200, net fixed assets of $51,500, and a profit margin of 5 percent. The firm has no long-term debt and does not plan on acquiring any. The firm does not pay any dividends. Sales are expected to increase by 3 percent next year. If all assets, short-term liabilities, and costs vary directly with sales, how much additional equity financing is required for next year?

A) −$908.50
B) −$722.50
C) $967.30
D) $1,698.00
E) $1,512.00