Gupta Corporation Has Forecasted Its Need for External Funding in the Following

question 44

Multiple Choice

Gupta Corporation has forecasted its need for external funding in the following year. It needs to raise $2 million in either debt or equity. It would like to minimize its need for external funding without decreasing its projected growth. Which of the following would reduce its need for additional funding?

• A)An increase in the dividend payout ratio
• B)An increase in days' sales outstanding
• C)An increase in accounts payable
• D)A decrease in inventory turnover

---

Definitions:

Government Expenditures

The total amount of money that a government spends on public services, infrastructure, defense, and welfare programs.

Business Cycle

The fluctuations in economic activity that an economy experiences over a period of time, characterized by periods of boom and recession.

Marginal Propensity

Marginal propensity, in economics, refers to the fraction of an increase in income that is spent on consumption. It represents the change in consumption resulting from a change in income.

Government Spending

This refers to the total expenditure by government agencies on goods, services, and public works.