When Using the Percent-Of-Sales Method in Forecasting Funds Needed, Which

question 37

Multiple Choice

When using the percent-of-sales method in forecasting funds needed, which of the following is not true?

• A) As the dividend payout ratio decreases, the required new funds also increase.
• B) Required new funds decrease as profits margins increase.
• C) Required new funds increase as the dividend payout decreases.
• D) As the tax rate increases, the required new funds increase.

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Definitions:

Respondent Behavior

A type of behavior in psychology that is elicited by a stimulus, and is reflexive or involuntary.

Operant Behavior

Behavior that is controlled by consequences, including rewards and punishments, following the behavior.

Pavlov

A Russian physiologist best known for his discovery of classical conditioning, where an organism learns to associate a neutral stimulus with a reflexive response.

Frequency

The number of complete wavelengths that pass a point in a given time (for example, per second).