The percent of sales method assumes that all assets and all liabilities increase proportionally with sales, but retained earnings does not.

True

False

2.8 points

QUESTION 31

A bond with a coupon rate of 8% will also have a yield to maturity of 8%.

True

False

2.8 points

QUESTION 32

Over the relevant range of output, fixed costs remain unchanged.

True

False

2.8 points

QUESTION 33

Discretionary financing needed is equal to the predicted change in total assets minus the change in retained earnings.

True

False