Among the Models Followed to Develop a Financial Plan, the Following

question 55

Multiple Choice

Among the models followed to develop a financial plan, the following is the simplest:

• A) Percentage of sales model
• B) Regression model
• C) Computer simulation model
• D) None of the above

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Definitions:

Minimum Financial Tests

Financial benchmarks or ratios a company must achieve or maintain to comply with certain agreements, often related to debt covenants.

Borrower Must

Obligations or conditions a borrower needs to fulfill as per the terms of the loan agreement.

Debt Covenants

Specific agreements entered into by a borrower and lender, included in the terms of a loan or bond issuance, which place restrictions on the borrower to protect the lender.

Repayment Capacity

An assessment of a borrower's ability to repay a loan based on their financial situation.