Franklin Industries Has a Current Net Working Capital of $1

question 24

Multiple Choice

Franklin Industries has a current net working capital of $1 million.It expects that this will grow at a rate of 3% annually forever.What growth rate in working capital would the firm require in order to achieve a $2 million increase in firm value,given that it has a cost of capital of 7%?

• A)2%
• B)2.7%
• C)3.3%
• D)1.4%
• E)4%

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Definitions:

Discursive Closure

The process by which discourse closes off certain lines of argument or inquiry, establishing a dominant narrative or perspective.

Organizations

Groups or entities comprising individuals who work together towards common goals or objectives, typically structured to optimize resources and efforts.

Frankfurt School

A group of mid-20th century theorists who developed critical theories about society, culture, and economy in a capitalist system.

Culture

The sum of attitudes, customs, and beliefs that distinguishes one group of people from another, transmitted from generation to generation.