Jill's Wigs Inc

Multiple Choice

Jill's Wigs Inc.had the following balance sheet last year:
Cash:$ 800
Accounts payable:$ 350
Accounts receivable:450
Accrued wages:150
Inventory:950
Notes payable:2,000
Net fixed assets:34,000
Mortgage:26,500
Common stock:3,200
Retained earnings:4,000
Total assets:$36,200
Total liabilities and equity:$36,200
Jill has just invented a non-slip wig for men which she expects will cause sales to double,increasing after-tax net income to $1,000.She feels that she can handle the increase without adding any fixed assets.(1) Will Jill need any outside capital if she pays no dividends?
(2) If so,how much?

A) No;zero
B) Yes;$7,700
C) Yes;$1,700
D) Yes;$700
E) No;there will be a $700 surplus.