If a Firm Equates Its Pro Forma Sales Growth to the Rate

question 10

Multiple Choice

If a firm equates its pro forma sales growth to the rate of sustainable growth, and has positive net income and excess capacity, then the:

• A) maximum capacity level will have to increase at the same rate as sales growth.
• B) total assets will have to increase at the same rate as sales growth.
• C) debt-equity ratio will increase.
• D) retained earnings will increase.
• E) number of common shares outstanding will increase

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Definitions:

Displace

To move or transfer someone or something from one place to another, often referring to the emotional process of redirecting feelings from the original source towards a substitute target.

Boundaries

Limits that individuals set in order to create reasonable, safe, and permissible ways for other people to behave towards them.

Information

Data, facts, or details obtained through study, research, instructions, or communication.

Resistive Behaviors

Actions or attitudes that express opposition or noncompliance, often seen in therapeutic or caregiving settings.