Exam 19: Long-Term Financial Planning

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A firm's goal is to maintain a 75% debt-equity ratio.How much equity would be required if the results of a financial planning model indicate that the firm's assets will grow to $4 million?

(Multiple Choice)

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Question 21

Increased needs for net working capital are:

(Multiple Choice)

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Question 22

A major difference between financial planning and forecasting is that financial planning:

(Multiple Choice)

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Question 23

Which of the following statements is correct for a firm that has a sustainable growth rate that exceeds its projected growth rate in assets?

(Multiple Choice)

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Question 24

A firm that wants to increase its sustainable growth rate can do so by the ratio or by the or both.

(Multiple Choice)

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Question 25

An all equity financed firm has an asset turnover of 2,and its plowback ratio is 50%.Determine its Maximum payout ratio that will allow an 8% internally generated growth.

(Multiple Choice)

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Question 26

Which of the following statements is correct concerning the internal growth rate?

(Multiple Choice)

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Question 27

What is the difference between the internal and sustainable growth rates,both in definition and in calculation? In what case are the rates equal?

(Essay)

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Question 28

A firm has $1 million in current sales volume and an internal growth rate of 15% .If sales are expected to increase by $100,000,then:

(Multiple Choice)

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Question 29

When most of the elements of a financial plan are related to sales levels,the plan is:

(Multiple Choice)

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Question 30

Financial plans covering a short planning horizon rarely extend beyond:

(Multiple Choice)

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Question 31

Which of the following statements is correct concerning the sustainable growth rate?

(Multiple Choice)

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Question 32

Adaptability is not a desirable feature in financial plans.

(True/False)

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Question 33

If sales growth for XYZ Corporation exceeds 6%,which in turn causes XYZ to seek external financing,then 6% is the:

(Multiple Choice)

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Question 34

Why is it important that financial plans incorporate adaptability?

(Essay)

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Question 35

If a firm chooses to maintain a fixed debt-equity ratio,they can raise the additional needed funds by:

(Multiple Choice)

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Question 36

Which of the following might indicate the correct choice of a plug figure if a financial plan shows sources of funds to be $100,000 and uses of funds to be $90,000?

(Multiple Choice)

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Question 37

Why is it uncommon to expect assets to change proportionately with sales?

(Essay)

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Question 38

What is the maximum internal growth rate consistent with not requiring external funding for a firm reporting net income of $500,000,a dividend payout ratio of 40%,and total assets of $10 million?

(Multiple Choice)

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Question 39

Outputs from a financial plan would include such items as:

(Multiple Choice)

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Question 40

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Exam 19: Long-Term Financial Planning

A firm's goal is to maintain a 75% debt-equity ratio.How much equity would be required if the results of a financial planning model indicate that the firm's assets will grow to $4 million?

Increased needs for net working capital are:

A major difference between financial planning and forecasting is that financial planning:

Which of the following statements is correct for a firm that has a sustainable growth rate that exceeds its projected growth rate in assets?

A firm that wants to increase its sustainable growth rate can do so by __________ the __________ ratio or by __________ the __________ or both.

An all equity financed firm has an asset turnover of 2,and its plowback ratio is 50%.Determine its Maximum payout ratio that will allow an 8% internally generated growth.

Which of the following statements is correct concerning the internal growth rate?

What is the difference between the internal and sustainable growth rates,both in definition and in calculation? In what case are the rates equal?

A firm has $1 million in current sales volume and an internal growth rate of 15% .If sales are expected to increase by $100,000,then:

When most of the elements of a financial plan are related to sales levels,the plan is:

Financial plans covering a short planning horizon rarely extend beyond:

Which of the following statements is correct concerning the sustainable growth rate?

Adaptability is not a desirable feature in financial plans.

If sales growth for XYZ Corporation exceeds 6%,which in turn causes XYZ to seek external financing,then 6% is the:

Why is it important that financial plans incorporate adaptability?

If a firm chooses to maintain a fixed debt-equity ratio,they can raise the additional needed funds by:

Which of the following might indicate the correct choice of a plug figure if a financial plan shows sources of funds to be $100,000 and uses of funds to be $90,000?

Why is it uncommon to expect assets to change proportionately with sales?

What is the maximum internal growth rate consistent with not requiring external funding for a firm reporting net income of $500,000,a dividend payout ratio of 40%,and total assets of $10 million?

Outputs from a financial plan would include such items as:

Goals and Governance of the Firm

Financial Markets and Institutions

Accounting and Finance

Measuring Corporate Performance

The Time Value of Money

Valuing Bonds

Valuing Stocks

Net Present Value and Other Investment Criteria

Using Discounted Cash Flow Analysis to Make Investment Decisions

Project Analysis

Introduction to Risk, Return, and the Opportunity Cost of Capital

Risk, Return, and Capital Budgeting

The Weighted-Average Cost of Capital and Company Valuation

Introduction to Corporate Financing and Governance

Venture Capital, IPOs, and Seasoned Offerings

Debt and Payout Policy

Leasing

Payout Policy

Short-Term Financial Planning

Cash and Inventory Management

Credit Management and Collection

Mergers, Acquisitions, and Corporate Control

International Financial Management

Options

Risk Management

Filters

A firm that wants to increase its sustainable growth rate can do so by the ratio or by the or both.