The Effects of a Change in Sales on Working Capital

question 103

Multiple Choice

The effects of a change in sales on working capital will be seen in which section of a financial plan?

• A) Output section
• B) Pro forma financial statements
• C) Planning model
• D) Sources and uses of funds

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Definitions:

Money Supply

The entire amount of cash and cash equivalents present in an economy at a designated time, including money in the form of coins, notes, and funds held in checking and savings accounts.

Money Multiplier

A factor that quantifies the amount of additional money that can be created in a bank's lending process for a given amount of reserves.

Excess Reserves

Excess reserves are the capital reserves held by a bank or financial institution in excess of what is required by regulators, central bank, or other financial authority.

Opportunity Cost

Missing out on potential opportunities from different choices when opting for a single alternative.