Jefferson City Computers Has Developed a Forecasting Model to Estimate

question 21

Multiple Choice

Jefferson City Computers has developed a forecasting model to estimate its AFN for the upcoming year.All else being equal,which of the following factors is most likely to lead to an increase of the additional funds needed (AFN) ?

• A) A sharp increase in its forecasted sales.
• B) A sharp reduction in its forecasted sales.
• C) The company reduces its dividend payout ratio.
• D) The company switches its materials purchases to a supplier that sells on terms of 1/5,net 90,from a supplier whose terms are 3/15,net 35.
• E) The company discovers that it has excess capacity in its fixed assets.

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Definitions:

Persuade

The act of convincing someone to do or believe something through reasoning or argument.

Social Stimuli

External events or circumstances that can elicit or influence social behavior and responses.

Central Route

A method of persuasion that involves carefully constructing and presenting a logical argument.

Elaboration Likelihood

A theory suggesting the degree to which people are likely to pay attention to and elaborate on persuasive messages, influenced by their motivation and ability to process the message.