Question
A company expects sales to increase during the coming year, and it is forecasting the additional capital that it must raise. Which of the following
A company expects sales to increase during the coming year, and it is forecasting the additional capital that it must raise. Which of the following conditions would have a negative impact on cash available to support operations (i.e., cause additional funds needed (AFN) by the firm to increase)?
a. | The company previously thought its fixed assets were being operated at full capacity, but now it learns that it actually has excess capacity. | |
b. | The company increases its dividend payout ratio. | |
c. | The company decides to stop taking discounts on purchased materials. | |
d. | The companys profit margin increases. | |
e. | The company begins to pay employees monthly (i.e., at the end of the month) rather than weekly. |
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