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Financial plans generally tend to ignore which one of the following?
Correct answer(s):
- risks associated with cash flows
Sal’s Pizza has a dividend payout ratio of 10 percent. The firm does not want to issue additional equity shares but does want to maintain its current debt-equity ratio and its current dividend policy. The firm is profitable. Which one of the following defines the maximum rate at which this firm can grow?
Correct answer(s):
- sustainable growth rate
If a firm equates its pro forma sales growth to the rate of sustainable growth, and has positive net income and excess capacity, then the:
Correct answer(s):
- retained earnings will increase.
The sustainable growth rate:
Correct answer(s):
- assumes the debt-equity ratio is constant.
Which one of the following will cause the sustainable growth rate to equal to internal growth rate?
Correct answer(s):
- equity multiplier of 1.0
The external financing need:
Correct answer(s):
- will limit growth if unfunded.
Which of the following sentences is correct?
- One of my friends are lawyers
- One of my friend is a lawyer
- One of my friends is a lawyer
- One of my friends are a lawyer
Correct answer(s):
- One of my friends is a lawyer
The best passive form of the sentence: ‘We don’t like idle people’-
Correct answer(s):
- Idle people are not liked by us
The antonym for ‘inimical’-
Correct answer(s):
- Friendly
What kind of noun is ‘Girl’?
Correct answer(s):
- Common
What kind of man is quite the opposite type of ‘supercilious’?
Correct answer(s):
- Affable
What is the full name of the great American short story writer O’Henry?
Correct answer(s):
- William Sydney Porter
All else constant, which one of the following will increase the internal rate of growth?
Correct answer(s):
- decrease in total assets
Blasco Industries is currently at full-capacity sales. Which one of the following is limiting sales to this level?
Correct answer(s):
- fixed assets
Sales can often increase without increasing which one of the following?
Correct answer(s):
- fixed assets
A firm’s external financing need is financed by which of the following?
Correct answer(s):
- debt or equity
Martin Aerospace is currently operating at full capacity based on its current level of assets. Sales are expected to increase by 4.5 percent next year, which is the firm’s internal rate of growth. Net working capital and operating costs are expected to increase directly with sales. The interest expense will remain constant at its current level. The tax rate and the dividend payout ratio will be held constant. Current and projected net income is positive. Which one of the following statements is correct regarding the pro forma statement for next year?
Correct answer(s):
- Total assets will increase at the same rate as sales.
Which one of the following will increase the maximum rate of growth a corporation can achieve?
Correct answer(s):
- decrease in the dividend payout ratio
A firm’s net working capital and all of its expenses vary directly with sales. The firm is operating currently at 96 percent of capacity. The firm wants no additional external financing of any kind. Which one of the following statements related to the firm’s pro forma statements for next year must be correct?
Correct answer(s):
- The firm cannot exceed its internal rate of growth.
The plowback ratio is:
Correct answer(s):
- the percentage of net income available to the firm to fund future growth.