Refer to Scenario 9

question 131

Multiple Choice

Refer to Scenario 9.1 below to answer the question(s) that follow.
SCENARIO 9.1: Amy borrowed $20,000 from her parents to open a bagel shop. She pays her parents a 5% yearly return on the money they lent her. Her other yearly fixed costs equal $9,000. Her variable costs equal $30,000. In her first year, Amy sold 40,000 dozen at a price of $1.50 per dozen.
-Refer to Scenario 9.1. Amy's total costs equal

• A) $39,000.
• B) $40,000.
• C) $50,000.
• D) $59,000.

Explain the rationale and benefits of financial planning, despite inherent uncertainties.

Identify the elements that must be incorporated into effective financial planning.

Understand the concept of the percentage of sales approach and its importance in financial planning.

Explain the assumptions underlying the sustainable growth rate and its implications for a firm's future.