To Determine the Amount of Additional Funds Needed, You May

question 27

True/False

To determine the amount of additional funds needed, you may subtract the expected increase in liabilities (a source of funds) from the sum of the expected increases in retained earnings and assets (both uses of funds).

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Definitions:

After-tax Return

The profit from an investment after all taxes have been subtracted, indicating the net gain to the investor.

Time Horizons

The length of time over which an investment is expected to be held before it is liquidated, ranging from short-term to long-term periods.

Casualty Insurance

Insurance coverage for loss or liability stemming from a sudden, accidental event.

Equity Securities

Financial assets representing ownership interest in a company, such as stocks, which provide income through dividends and potential for capital gain.