Building a Model for Long-Term Forecasting Reveals Points in the Future

question 124

Multiple Choice

Building a model for long-term forecasting reveals points in the future where the firm will need ________ when retained earnings are not enough to fund planned future investments.

• A)external financing
• B)stock dividends
• C)dividend payments
• D)mergers
• E)large cash reserves

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Definitions:

Economic Profit

The variance between an enterprise's aggregate income and total outlays, taking into account both clear and assumed costs.

Short-Run Equilibrium

The state in a market where supply equals demand within a limited time frame, before any long-term adjustments take place.

Long-Run Equilibrium

A state in which all factors of production and outputs are optimal, allowing for all economic agents to have no incentive to change their behavior.

MC

A term often short for Marginal Cost, which is the cost added by producing one additional unit of a product or service.