What Is the Next Step in the Financial Planning Process

question 25

Multiple Choice

What is the next step in the financial planning process after a firm develops a sales forecast?

• A) determine additional funds needed to finance operations
• B) determine the assets required to meet the sales target
• C) determine the firm's optimal capital structure
• D) estimate the degree of operating leverage

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Definitions:

Common Resources

Refers to goods that are non-excludable and rival in consumption, such as fish stocks in the ocean or public parks, where usage by one person reduces availability for others.

Marginal Social Cost

The cost to society of producing one additional unit of a good or service.

Private Supply

The provision of goods or services by businesses or individuals rather than by the government.

Marginal Social Cost

The total cost society pays for the production of an additional unit of a good or service, including both private costs and any external costs.