When Using the Percent-Of-Sales Method in Forecasting the Funds Needed

question 72

Multiple Choice

When using the percent-of-sales method in forecasting the funds needed, which of the following is not true?

• A)As the dividend payout ratio increases, the required new funds also increase.
• B)Required new funds decrease as profit margin increases.
• C)Required new funds increase as the dividend payout decreases.
• D)As the tax rate increases, the required new funds increase.

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Definitions:

Time-Driven Activity-Based Costing

An accounting method that assigns costs to products or services based on the actual time taken to perform various activities.

Tech Support Department

A division within a company that provides assistance and troubleshooting services for technology products or services.

Customer Cost Analysis

The process of evaluating all costs involved in acquiring and maintaining customers against the revenue they generate.

Time-Driven Activity-Based Costing

A cost accounting method that assigns costs based on the time resources are used by activities, using time as the driving factor.