The First Step Involved in Predicting Financing Needs Is

question 75

Multiple Choice

The first step involved in predicting financing needs is

• A)project the firm's sales revenues and expenses over the planning period.
• B)estimating the levels of investment in current and fixed assets that are necessary to support the projected sales.
• C)determining the firm's financing needs throughout the planning period.
• D)estimating the cost of debt.

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Definitions:

Managerial Decision

The process by which management responds to opportunities and threats by analyzing options and making determinations about specific organizational goals and courses of action.

NPV

NPV (Net Present Value) is a calculation used to assess the profitability of an investment by discounting future cash flows back to their present value.

IRR

The Internal Rate of Return (IRR) serves as a financial measure designed to calculate the potential profitability of investments.

Capital Cost Allowance

The annual depreciation expense that a company can claim as a deduction for tax purposes on its capital assets.