Which of the following do not vary directly with sales?

I Equity

II Accounts payable

III Long-term debt

IV Notes payable

A) I and II only

B) III and IV only

C) I, III, and IV only

D) I, II, and III only

E) I, II, III, and IV

The sustainable growth rate of a firm is best described as:

A) The maximum growth rate achievable without using any external equity financing, while maintaining a constant debt-equity ratio.

B) The minimum growth rate achievable if the firm maintains a constant equity multiplier.

C) The minimum growth rate achievable if the firm does not pay out any cash dividends.

D) The maximum growth rate achievable without external financing of any kind.

E) The maximum growth rate achievable without any limits on the amount of debt financing used.

Which of the following is a common ingredient among financial planning models?

I. Sales forecasts

II. Asset requirements

III. Pro forma statements

IV. Financial requirements

A) I only

B) II only

C) I and III only

D) II and IV only

E) I, II, III, and IV

For financial planning purposes, we generally define the short run as ___________, and the long run as ____________.

A) 2 years; 3-5 years

B) 1 year; 2-5 years

C) 1 year; 2-6 years

D) 1 years; 2-4 years

E) None of the above

A preferred stock dividend is:

A) Treated as an interest expense.

B) Payable only if current operations generate sufficient cash in a year to pay the dividend.

C) Paid only to senior holders of common stock.

D) Carried forward as an arrearage if not paid.

E) None of the above