Question text Assume the following facts about a firm: Sales(this year) were $100,000, net income(this year) was $10,000, assets(this year) were $50,000, current liabilities(this year) were $2,000, Anticipated growth rate is 12%. The proposed dividend payout ratio is 60%. The firm's external funding requirement for next year is? (Hint: You don't have to remember the EFR formula. Just realize that the funding requirement is the growth in assets less that in current liabilities less next year's retained earnings.) Select one: a. $1,280 b. ($960) c. $1,760 d. $800

Question text If a firm does not have any debt, what is true about the components of the sustainable growth rate? Select one: a. The retention ratio is 100%. b. The dividend payout ratio is 100%. c. The ROA multiplied by the retention ratio is equal to the sustainable growth rate d. The ROE is greater than the ROA.

The time period covered by a business plan is often called the: Select one: a. plan's maturity. b. budget period. c. planning horizon. d. planning quarter.

Which of the following is an indirect planning assumption? Select one:

a. A 3% reduction in product price b. A decrease in interest rates from 8% to 7% c. An improvement in the average collection period from 45 to 40 days d. None of the above are indirect assumptions.

Question text Which of the following is not a purpose of business planning? Select one: a. Communicating information to investors b. Making a statement of goals c. Credibility and supporting detail d. Provide pro forma statements based on hypothetical circumstances

Question text Which of the following is true of top-down or bottom-up planning? Select one: a. Bottom-up plans tend to overstate achievable performance. b. Bottom-up plans do not include judgment by top-level executives. c. Top-down plans are usually conservative.