Which One of the Following Statements Is Correct Concerning the Internal

question 3

Multiple Choice

Which one of the following statements is correct concerning the internal growth rate?

• A) It is maximized when the payout ratio equals zero.
• B) It is maximized when the plowback ratio equals zero.
• C) It cannot be less than the sustainable growth rate.
• D) It decreases as total assets decrease.

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Definitions:

Restrictive Policy

A restrictive policy refers to a set of rules or regulations designed to limit or control certain activities or behaviors, often implemented to ensure safety, security, or compliance with legal standards.

Flexible Policy

A strategy or guideline that allows for adaptability and changes depending on circumstances or conditions.

Carrying Costs

Expenses incurred by holding or storing inventory, including insurance, storage, and handling costs.

Shortage Costs

Costs incurred when demand exceeds supply, often related to lost sales and the cost of restocking.