A Firm Has Targeted a 20% Growth in Sales This

question 69

Multiple Choice

A firm has targeted a 20% growth in sales this year. Last year's cash as a percent of sales was 10%, accounts receivable 30%, and inventory 25%. What percentage growth in current liabilities is required to support the growth in sales under the percent-of-sales forecasting method?

• A) 32%
• B) 13%
• C) 8%
• D) Not enough information to determine

Recognize the requirements for regulatory flexibility analyses.

Comprehend the structure and authority of executive and independent regulatory agencies.

Appreciate the importance of maintaining good relations with regulatory agencies.

Understand the process and significance of administrative law judge decisions in agency disputes.

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Definitions:

Tax Structure

Specifies how a tax depends on the tax base; usually expressed in percentage terms.

Tax Base

The measure or value, such as income or property value, that determines how much tax an individual pays.

Taxation

The process whereby authorities impose financial charges on citizens or corporations to fund government spending and public expenditures.

Progressive

In the context of tax policy, a tax system where the tax rate increases as the taxable amount increases, leading to a more significant tax burden on higher-income individuals.