Leo Corp, an Automobile Company, Experienced an Increase in Growth Rate

question 19

Multiple Choice

Leo Corp., an automobile company, experienced an increase in growth rate this year as the company sold its products at a lesser rate due to the economic conditions that the industry recently went through. This has helped the company to attain more investments than before and consequently to invest in new assets, research and development, and new product development. Which of the following macroeconomic forces does this scenario best illustrate?

• A)Currency exchange rate
• B)Economic growth
• C)Inflation
• D)Interest rate

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Definitions:

Pro-forma Cash Flow

An estimate of future cash inflows and outflows of a company, usually projecting future financial performance.

Income Statement

A financial statement that shows a company’s revenues, expenses, and profits over a specific period, typically a quarter or year.

Credit Application

A form or request made by an individual to a financial institution for extending credit.

Capacity

The maximum amount that something can contain or produce.