Which of the Following Require Adjustments When Forecasting Asset Needs

question 43

Multiple Choice

Which of the following require adjustments when forecasting asset needs as a percent of sales?

• A)If assets must be purchased in large,discrete quantities
• B)When the firm has excess capacity
• C)When assets can be leased rather than purchased
• D)Both A and B

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Definitions:

Face Value

The nominal or dollar value printed on a financial instrument, such as a bond or stock certificate, representing its legal value.

Semiannually

A term that describes an event or action that occurs twice a year, typically every six months.

Bond Premium

The amount by which the selling price of a bond exceeds its face value, typically resulting from interest rates lower than the bond's coupon rate.

Interest Payment

The payment made to creditors or bondholders as compensation for the use of borrowed money, typically calculated as a percentage of the principal.