The External Funds Needed (EFN) Equation Projects the Addition to Retained

question 9

Multiple Choice

The external funds needed (EFN) equation projects the addition to retained earnings as:

• A) Net Profit Margin *\(\Delta\) Sales.
• B) Net Profit Margin * \(\Delta\) Sales * (1 - d).
• C) Net Profit Margin * Projected sales*(1 - d).
• D) Projected sales * (1 - d).
• E) Net Profit Margin * Projected sales.

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Definitions:

Cobb-Douglas Production Function

Production function of the form q = AK^aL^b, where q is the rate of output, K is the quantity of capital, and L is the quantity of labor, and where A, a, and b are constants.

Optimal Input Demands

The combination of inputs that minimizes the cost of producing a given output or maximizes output for a given cost.

Expenditures

Money spent on goods, services, or other expenses.

Scale Economies Index

A measurement that assesses the advantages a business gains due to the scale of its operation, typically resulting in reduced costs per unit as production increases.