The Basic Driving Variable for a Company's Short-Term Financial Planning

question 5

Multiple Choice

The basic driving variable for a company's short-term financial planning model would be:

• A)Gross profit margin
• B)sales
• C)desired ending inventory
• D)debt maturity structure

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Definitions:

Production System

The combination of inputs, processes, and outputs that creates goods or services in an organized manner.

Labor Inputs

The quantity of labor used in the production process, often measured in hours worked or number of employees.

Decreasing Returns

A situation in which adding more of one factor of production, while holding others constant, will yield progressively smaller increases in output.

Factor of Production

An input used in the production of goods or services, such as land, labor, capital, and entrepreneurship.