Which of the Following Are Typical Planning Assumptions

question 146

Multiple Choice

Which of the following are typical planning assumptions?

• A) A 10% increase in sales
• B) An increase in interest rates from 9% to 11%
• C) A decrease in the firm's inventory turnover from 3x to 2x
• D) All of the above

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Definitions:

Debt-Equity Ratio

The ratio that delineates the usage of shareholder equity and debt in the financing of company assets.

Pre-Tax Cost

The expense or cost associated with an activity or asset before the application of taxes, often used in financial analysis.

Required Return

The minimum expected return investors demand for investing in a security or project.

Unlevered Return

A return on investment that doesn't account for debt, measuring the performance of an investment as if no borrowing took place.