A Firm Has Current Sales of $42,000 A)$1,834
B)$2,958
C)$3,847
D)$4,128
E)$4,341

Multiple Choice

A firm has current sales of $42,000. Projected sales for next year are $44,000. The percentage of sales approach is used for pro forma purposes. All balance sheet accounts, except long-term debt and common stock, change according to that approach. The expected increase in retained earnings is $2,500. What is the projected external financing need given the following current account values?
$\begin{array}{lrr}\text { Current assets } & \$ 11,000 \\\text { Net fixed assets } & \$ 25,000 \\\text { Current liabilities } & \$ 5,600 \\\text { Long-term debt } & \$ 10,500 \\\text { Common stock } & \$ 4,500 \\\text { Retained earnings } & \$ 10,500\end{array}$

A) $1,834
B) $2,958
C) $3,847
D) $4,128
E) $4,341