Which of the Following Would Be Considered an Internal Exchange

question 3

Multiple Choice

Which of the following would be considered an internal exchange transaction?

• A)The General Fund transfers $200,000 to establish a Central Supplies Fund; this amount will not be repaid.
• B)The General Fund transfers $125,000 to the Debt Service Fund for payment of currently due bond interest payments.
• C)The General Fund orders and receives supplies from the Central Supplies Fund in the amount of $9,000.
• D)The Capital Projects Fund completes a library building project and transfers the remaining cash to the Debt Service Fund.

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Definitions:

Full Capacity

The maximum level of output that a company can produce under normal conditions over a given time period.

EFN

Expected Funds Needed, an estimation of the additional financing a company will require in the future based on its projected growth and existing financial structure.

Sustainable Growth Rate

The maximum rate at which a company can grow its sales and earnings without increasing leverage or debt financing.

Leverage Ratios

Financial metrics that assess the level of debt in a company's capital structure relative to its equity or assets.