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

question 66

Multiple Choice

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

• A) Required new funds increase as sales decrease.
• B) Required new funds decrease as profit margin increases.
• C) Required new funds increase as assets increase.
• D) As the tax rate increases, the required new funds increase.

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