Which One of the Following Would Increase a Firm's Need

question 54

Multiple Choice

Which one of the following would increase a firm's need for additional funds?

• A) an increasing profit margin
• B) a decreasing expected sales growth rate
• C) an increase in accruals
• D) an increasing dividend payout rate
• E) a decrease in assets

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Definitions:

Periodic Interest Rate

This is the interest rate charged or earned over a particular period of time, often calculated based on the annual interest rate.

Payment Interval

The frequency at which payments are made, such as monthly, quarterly, or annually.

Compounded Annually

Interest on an investment or loan calculated once a year, taking into account the interest that has accrued in the previous period.

Current Economic Value

An estimation of the present worth of an asset or company based on its capacity to generate income in the current economic environment.