A firm's net working capital and all of its expenses vary directly with sales. The firm is operating currently at 96 percent of capacity. The firm wants no additional external financing of any kind. Which one of the following statements related to the firm's pro forma statements for next year must be correct?
A. Total liabilities will remain constant at this year's value.
B. The maximum rate of sales increase is 4 percent.
C. The firm cannot exceed its internal rate of growth.
D. The projected owners' equity will equal this year's ending equity balance.
E. Fixed assets must remain constant at the current level.
Ans: C. The firm cannot exceed its internal rate of growth.
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The first step of the minimal spanning tree solution method is to:
A) select any starting node. B) select the node closest to the starting node to join the spanning tree. C) select the closest node not presently in the spanning tree. D) arbitrarily select any path in the network from origin to destination.