Discretionary Financing Needs Will Be Higher If ________

question 144

Multiple Choice

Discretionary financing needs will be higher if ________.Assume "all else equal."

• A) the firm's net profit margin increases
• B) sales decline
• C) the dividend payout ratio is raised
• D) excess capacity exists for fixed assets

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Definitions:

Selling Price

The amount of money a buyer pays to purchase a product or service.

Revaluation Model

An accounting method that allows for the upward adjustment in the carrying amount of a fixed asset to reflect its current market value.

Exchange Rate

The price at which one currency can be exchanged for another currency in the foreign exchange market.