Assume That Hercules Manufacturing Has Sales of $25 Million and Current

Multiple Choice

Assume that Hercules Manufacturing has sales of $25 million and current assets of $5 million. The corporation utilizes the percent-of-sales method of financial forecasting. If Hercules is expected to generate sales of $31 million next year, what will the firm's investment in current assets be?

A) $8.3 million
B) $4.0 million
C) $6.2 million
D) $5.0 million