Answered step by step
Verified Expert Solution
Question
1 Approved Answer
PART I: TOTAL 20 MARKS (2 marks each). State whether the following questions are TRUE, FALSE OR UNCERTAIN. You do not have to justify your
PART I: TOTAL 20 MARKS (2 marks each). State whether the following questions are TRUE, FALSE OR UNCERTAIN. You do not have to justify your answer. 1. The internal and sustainable growth rates will be equal when the firm is 100% equity financed. 2. A common, long-term financial planning horizon would stretch for 15 to 20 years. 3. The primary aim of financial planning is to obtain better forecasts of future cash flows and earnings. 4. Financial plans will succeed only if the forecasts are perfect. 5. A sign that a firm is efficient is high proftability ratios. 6. Financial ratios do not tell the whole story, although they should prompt the right questions. 7. A firm's internal growth rate of 10% means that external financing will not be required unless sales growth exceeds 10%. 8. The sustainable growth rate increases as the payout ratio decreases. 9. If the rate of time preference is higher than the real rate of interest, then people will save less and consume more. 10. The current market value of a future cash flow is given by its present value
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started