Suppose That in the Control Phase of the Financial Planning

question 62

Multiple Choice

Suppose that in the control phase of the financial planning process a firm discovers it cannot raise the funds that are required to meet the forecasted sales. In this situation, the firm should ______. 

• A)use available cash to repay as many outstanding loans as possible
• B)scale back its projected level of operations
• C)expand its plant and equipment to the level necessary to meet the sales forecast
• D)build up its inventory quickly
• E)reformulate its plans to increase retained earnings and to decrease the dividend payments to stockholders

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Definitions:

Rest

The remaining part of something, often used when dividing or after subtracting a portion.

Ounces

A unit of weight used primarily in the United States, part of the imperial and US customary systems, equivalent to 28.35 grams.

Gold

a dense, malleable, yellow precious metal that is often used in jewelry, currency, and as an investment.

Earrings

Jewelry worn on the earlobes or other parts of the ear, often decorative and made from various materials like metal, stones, or beads.