A Firm Has $1 Million in Current Sales Volume and an Internal

question 2

Multiple Choice

A firm has $1 million in current sales volume and an internal growth rate of 15%. If sales are expected to increase by $100,000, then:

• A) the firm's forecast will not be met.
• B) dividends will have to be reduced.
• C) retained earnings will increase by $50,000.
• D)external funding will not be required.

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Definitions:

Total-Product Schedule

A table that shows the output of goods or services that a firm can produce with different combinations of input resources.

Constant Price

Prices adjusted for inflation to reflect the real value of goods and services over time.

Resource Employment

The utilization of various inputs like labor, capital, and raw materials in the production of goods and services.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource or input.