ABC Inc has done the following projections for its balance sheet: total assets of $15 million, current liabilities of $3 million, long-term liabilities of $8 million, and stockholders' equity of $2 million

Net new financing is the additional amount of funds that the firm needs to raise to pay for the planned increase in assets in the next year. It is calculated as :-

Net new financing = Projected Assets - Projected Liabilities & Equity

As per the data given in the above question :-

Projected assets = $15,000,000

Projected current liabilities = $3,000,000

Projected long-term liabilities = $8,000,000

Stockholder's equity = $2,000,000

Therefore, Net new financing = [Projected Assets - (Projected Current Liabilities + Projected long term liabilities + Stockholder's Equity)]

By putting the corresponding values in the above equation, we get :-

Net new financing needed for the follwoing year = $15,000,000 - ($3,000,000 + $8,000,000 + $2,000,000)

= $2,000,000

The required amount of net new financing needed for the following year = $2,000,000