Consultants, Inc

question 115

Multiple Choice

Consultants, Inc. is currently operating at full capacity. The profit margin and the dividend payout ratio are constant. Net working capital and fixed assets vary directly with sales. Sales are projected to increase by 5%. What is the external financing needed?

• A) -$293.78
• B) -$193.78
• C) $122.50
• D) $292.50
• E) $367.27

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Definitions:

Credits

Accounting entries that increase liabilities or equity or that decrease assets.

Cash Receipts

The collection of money, including coins, notes, cheques, and electronic transactions, received from activities such as sales or services.

Debiting

The act of recording an entry on the left side of an account, indicating an increase in assets or expenses or a decrease in liabilities, equity, or revenue.

Alphabetical Order

A method of sorting by arranging items according to the sequence of the letters in the English alphabet.