A Firm Has the Following Account Balances for This Year

question 29

Multiple Choice

A firm has the following account balances for this year.Sales for the year are $420,000.Projected sales for next year are $441,000.The percentage of sales approach is used for pro forma purposes.All balance sheet accounts,except long-term debt and common stock,change according to that approach.The firm plans to decrease the long-term debt balance by $23,500 next year.Retained earnings is expected to increase by $5,400 next year.What is the projected external financing need?

• A) -$14,150
• B) -$6,850
• C) $32,850
• D) $36,000
• E) $56,350

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Definitions:

Variable

Any characteristic, number, or quantity that can be measured or quantified, which may change across different conditions or over time.

Cumulative Percent

The percentage that represents the cumulative total of a data set up to a certain threshold, often used in statistical analysis.

Frequency Distribution

An overview of how often each unique value occurs in a dataset, often visualized with histograms or tables.

Score

A numerical representation of a particular measurement, such as a test result, indicating the performance, level, or achievement of an individual or group.