If Your fiRm Is Currently Operating at Full Capacity and You

question 340

Multiple Choice

If your firm is currently operating at full capacity and you expect strong sales growth over the next few years, you should most likely:

• A) Expect that assets will not grow.
• B) Raise your dividend payout to accommodate the growth.
• C) Put off any further financial planning until sales growth moderates.
• D) Expect external financing will be needed.
• E) Expect the growth in retained earnings to outpace the growth in sales.

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Definitions:

Public Goods

Goods that are non-excludable and non-rivalrous, meaning that individuals cannot be effectively excluded from use, and use by one individual does not reduce availability to others.

Private Consumption

The total value of all goods and services consumed by private households.

Pareto Efficient

An economic state where resources are allocated in a way that it is impossible to make any one individual better off without making at least one individual worse off.

Public Good

A commodity or service that is provided without profit to all members of a society, either by the government or a private individual or organization.