Building a Model for Long-Term Forecasting Reveals Points in the Future

question 75

Multiple Choice

Building a model for long-term forecasting reveals points in the future where the firm will have ________.

• A) excess cash that can be used for dividends, debt repayment, or stock repurchases
• B) cash needs that must be funded with external financing
• C) a need for expanding property, plant and equipment to meet increases in capacity
• D) all of the above

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Definitions:

Allowance Method

A method in accounting that involves estimating the accounts that are uncollectible at the end of each period to account for bad debts.

Receivables

Amounts owed to a company by customers or other parties as a result of the company providing goods or services on credit.

Bankruptcy

A judicial process concerning an individual or enterprise that cannot fulfill its debt obligations.

Service Contract

A formal agreement between a service provider and a client, detailing the terms of service to be rendered.