Assume Costs, Accounts Payable, and Current Assets All Increase at the Same

question 135

Multiple Choice

Assume costs, accounts payable, and current assets all increase at the same rate as sales. Also assume 80% of net income is paid out in dividends and that the firm is currently operating at 90% of capacity. If sales grow at 25%, compute external financing needed.

• A) $0.00
• B) $4.50
• C) $22.50
• D) $29.50
• E) $52.00

---

Definitions:

Spelling

The act of forming words from letters according to established patterns and rules.

Suffix

A letter or group of letters added at the end of a word to modify its meaning or change it into a different word class.

Knowledge

The information, understanding, and skills acquired through experience or education.

Prefix

A group of letters added at the beginning of a word to change its meaning, such as "un-" in "unhappy."