Spontaneous Funds Are Generally Defined as Follows

question 16

Multiple Choice

Spontaneous funds are generally defined as follows:

• A) A forecasting approach in which the forecasted percentage of sales for each item is held constant.
• B) Funds that a firm must raise externally through short-term or long-term borrowing and/or by selling new common or preferred stock.
• C) Funds that arise out of normal business operations from its suppliers, employees, and the government, and they include immediate increases in accounts payable, accrued wages, and accrued taxes.
• D) The amount of cash raised in a given year minus the amount of cash needed to finance the additional capital expenditures and working capital needed to support the firm's growth.
• E) Assets required per dollar of sales.

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