The MEB Corporation is expected to buy new equipment next year, so its Net Fixed

Question

The MEB Corporation is expected to buy new equipment next year, so its Net Fixed Assets will increase by $2,000,000. Current Assets are expected to increase $4,000,000. What are MEB Corporation's total financing needs for next year? Choose one: A. $8,000,000 B. $6,000,000 C. $2,000,000 Owner's Equity is expected to increase $1,500,000 and Accounts Payable will increase $500,000. How much money will MEB Corp. have to borrow to finance its needs? The MEB Corporation is expected to buy new equipment next year, so its Net Fixed Assets will increase by $2,000,000. Current Assets are expected to increase $4,000,000. What are MEB Corporation's total financing needs for next year? Choose one: A. $8,000,000 B. $6,000,000 C. $2,000,000 Owner's Equity is expected to increase $1,500,000 and Accounts Payable will increase $500,000. How much money will MEB Corp. have to borrow to finance its needs?

Explanation / Answer

MEB Corp. have to borrow to finance its needs = 6000000 - 1500000 - 500000

MEB Corp. have to borrow to finance its needs = $ 4,000,000

The MEB Corporation is expected to buy new equipment next year, so its Net Fixed Assets will increase by $2,000,000. Current Assets are expected to increase $4,000,000. What are MEB Corporation's total financing needs for next year? Total financing needs = 2000000+4000000 = 6000000 Choose one: B. $6,000,000 Owner's Equity is expected to increase $1,500,000 and Accounts Payable will increase $500,000. How much money will MEB Corp. have to borrow to finance its needs?

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