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:

Longitudinal Study

A research design that involves repeated observations of the same variables over short or long periods of time.

Experiment

A systematic activity carried out to test a hypothesis, discover a new fact, or demonstrate known facts.

Epidemiological Studies

Research studies that aim to understand the patterns, causes, and control of diseases in groups of people.

High-Risk

Refers to a greater likelihood of experiencing negative outcomes or developing a particular disease or condition.