If a firm uses external financing as a plug item, has a new capital budget of $3 million, a net income of $4 million, and a plowback ratio of 35%, how much should be raised in external funds?© BrainMass Inc. brainmass.com March 4, 2021, 7:45 pm ad1c9bdddf
Total funds needed are 3,000,000
Net Income = 4,000,000
A plowback ratio of 35% ...
The solution explains how to calculate the amount of external financing needed.