Great Subs Believes It Can Increase Sales by 50% Without

Multiple Choice

Great Subs believes it can increase sales by 50% without any increase in net fixed assets.Earnings after tax are expected to be $2,000.The company pays no dividends.What additional financing will Subs need to finance this growth? Subs' balance sheet currently is as follows:
$$\begin{array} { | l | r | l | r | } \hline \text { Cash } & \mathbf { 2 , 5 0 0 } & \text { Accaunts Payahle } & \text { 5,600 } \\\hline \text { Accaunts Rec. } & 4,400 & \text { Nater Payable } & 10,000 \\\hline \text { Inventory } & 6,000 & \text { Lang-term Debt } & 15,000 \\\hline \text { Fixed As5ets, net } & 47,700 & \text { Stockholde's Equity } & 30,000 \\\hline & \mathbf { 8 0 , 6 0 0 } & & \mathbf { 3 0 , 6 0 0 } \\\hline\end{array}$$

A) $3,350 surplus -- no additional financing needed
B) $1,650
C) $3,650
D) None of the answers is correct.