QUESTION $13$

sustainable growth rate for Rosengarten, you will find its only $5\mathrm{.}14$ percent. In our calculation for EFN, we used a growth rate of $25$ percent. How is this possible?

retention ratio or if its total asset turnover increases.

to fund and grow the company without issuing new debt or equity.

operations.

QUESTION $14$

affect the external funds needed?

It would reduce the external funds needed. If the company is not operating at full capacity, it would be able to increase sales without a commensurate increase in fixed assets.

It would increase the external funds needed. If the company is not operating at full capacity, it would have to borrow the funds for extra labor to compensate for the lost capacity.

competitor.

QUESTION $15$

As you increase the length of time involved, what happens to future values? What happens to present values?

Assuming positive cash flows and interest rates, the future value increases and the present value decreases.

Assuming positive cash flows and interest rates, the future value decreases and the present value increases.

Assuming negative cash flows and positive interest rates, the future value increases and the present value decreases.

QUESTION $16$

What happens to the future value of an annity if you increase the rate $r?$ What happens to the present value?

Assuming positive cash flows and interest rates, the present value will fall and the future value will rise.

Assuming negative cash flows and positive interest rates, the present value will fall and the future value will rise.

Assuming positive cash flows and interest rates, the present value will rise and the future value will decrease.