Cryo-vac expects sales to increase 20% next year from the current level of $5,000,000. The firm has current assets of $1,000,000 and fixed assets of $1,500,000. Cryo-vac has current liabilities of $750,000 of which $300,000 are in notes payable. What additional financing will Cryo-vac need to support the expected sales increase if its profit margin is 8% and the firm expects to pay out $200,000 in dividends? An increase in net fixed assets of $300,000 will be required. Hint: Assuming the (current assets) and (current liabilities- notes payable) will grow at the same rate as the sales. How much is the addition to retained earnings?
Group of answer choices
A. 480,000
B. 180,000
C. 280,000
D. 200,000