Which of the Following Is an Indirect Planning Assumption

question 28

Multiple Choice

Which of the following is an indirect planning assumption?

• A)A 3% reduction in product price
• B)A decrease in interest rates from 8% to 7%
• C)An improvement in the average collection period from 45 to 40 days
• D)None of the above are indirect assumptions.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds; this expense is a non-operating cost that appears on the income statement.

Total Debt Ratio

A financial metric that compares a company's total debt to its total assets, indicating how much of the company's assets are financed by debt.

Financial Position

A snapshot of the resources and obligations of a company or individual at a specific point in time, indicating the net worth or financial health.

Statement Of Comprehensive Income

A financial statement that includes all changes in equity during a period except those resulting from investments by and distributions to shareholders.