A Firm's Planning Model Has Assets and Cash Proportional to Sales

question 27

Multiple Choice

A firm's planning model has assets and cash proportional to sales. The firm maintains a constant dividend payout ratio and a constant debt to equity ratio. Keying in on the asset to sales ratio, the firm's sustainable growth is _________ and ________ the asset to sales ratio.

• A) higher; higher
• B) higher; lower
• C) lower; lower
• D) constant; higher
• E) constant; lower

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Definitions:

Unregulated Market

A market operating without governmental oversight, lacking controls over practices that can lead to unfair competition and consumer vulnerabilities.

Commodify

The process of turning something into a commodity that can be bought and sold.

Professional Association

An organization seeking to further a particular profession, the interests of individuals engaged in that profession, and the public interest.

Primary Labor Market

A sector of the labor market that offers high-quality, secure jobs with good pay, benefits, and opportunities for advancement.