Multiple Choice Questions

Multiple Choice Question 55

Planning models that are more sophisticated than the percent of sales method have

working capital accounts like inventory, accounts receivables, and accounts payables vary directly with sales.

all variable costs change directly with sales.

fixed assets that do not always vary directly with sales.

all of these are true.

Multiple Choice Question 66

 

Firms that achieve higher growth rates without seeking external financing

have a high plowback ratio.

all of these are true.

have less equity and/or are able to generate high net income leading to a high ROE.

are not highly leveraged.

Multiple Choice Question 85

 

External financing needed: Triumph Company has total assets worth $6,413,228. Next year it expects a net income of $3,145,778 and will pay out 70 percent as dividends. If the firm wants to limit its external financing to $1 million, what is the growth rate it can support?

32.9%

26.5%

6.4%

30.3%