Assume the Following Facts About a Firm The Firm's External Funding Requirement for Next Year Is
(Hint

question 26

Multiple Choice

Assume the following facts about a firm: $\begin{array}{lr}\text { Sales } _ {this year }&\$100,000\\\text { Net income }_ {this year }&\$10,000\\\text { Assets }_ {this year }&\$50,000\\\text { Current liabilities }_ {this year }&\$2,000\\\text { Anticipated growth rate }&12\%\\\text { Proposed dividend payout ratio }&60\%\end{array}$
The firm's external funding requirement for next year is
(Hint: You don't have to remember the EFR formula. Just realize that the funding requirement is the growth in assets less that in current liabilities less next year's retained earnings.)

• A) $1,280
• B) ($960)
• C) $1,760
• D) $800

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Definitions:

Equilibrium Price

The price at which the quantity of goods demanded equals the quantity of goods supplied, leading to market balance.

Brings Together

Describes the act of gathering or assembling people, items, or ideas in one location or conceptual framework.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to produce and sell, holding other factors constant.

Demand

The desire for a particular good or service combined with the ability and willingness to pay for it.