Exam 19: Long-Term Financial Planning

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A planner's percentage of sales model forecasts that sales will grow by 20% next year.If costs of goods sold are proportionate at 70% of sales,then costs of goods sold will:

(Multiple Choice)

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Question 81

Financial planning models routinely adjust for present value and risk.

(True/False)

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Question 82

To avoid inconsistency,financial planners should be sure to:

(Multiple Choice)

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Question 83

Financial planning is a process of deciding which risks to take.

(True/False)

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Question 84

Financial planning should attempt to minimize risk.

(True/False)

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Question 85

Comebaq Computers is aiming to increase its market share by slashing the price of its new range of personal computers.Are costs and assets likely to increase or decrease as a proportion of sales? Explain.

(Essay)

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Question 86

What are the possible choices of balancing items when using a financial planning model? Discuss whether some are generally preferable to others.

(Essay)

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Question 87

If a firm's dividend payout ratio is determined after achieving a specific capital structure,then:

(Multiple Choice)

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Question 88

Financial plans will succeed only if the forecasts are perfect.

(True/False)

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Question 89

Financial planning is concerned with possible surprises as well as the most likely outcomes.

(True/False)

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Question 90

A common,long-term corporate financial planning horizon would stretch for 15 to 20 years.

(True/False)

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Question 91

Which of the following would be most likely included as inputs to a firm's financial plan?

(Multiple Choice)

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Question 92

In a financial planning model:

(Multiple Choice)

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Question 93

Percentage of sales models usually assume that costs,fixed assets,and working capital all increase at the same rate as sales.When do you think that these assumptions do not make sense? Would you feel happier using a percentage of sales model for short-term or long-term planning?

(Essay)

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Question 94

The dividend payout ratio is directly related to a firm's internal growth rate.

(True/False)

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Question 95

Financial managers should be trained early in their careers to question financial forecasts.

(True/False)

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Question 96

Which of the following does not provide a "solution" to a projected growth rate in assets that exceeds the sustainable growth rate?

(Multiple Choice)

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Question 97

What amount of debt should a firm include in its financing mix in order to achieve a sustainable growth rate of 9% while maintaining a 40% dividend payout,a 10% profit margin,and an asset turnover of 1.5?

(Multiple Choice)

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Question 98

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

(Essay)

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Question 99

The observation that additions to fixed assets are "lumpier" than additions to current assets indicates that:

(Multiple Choice)

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Question 100

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Exam 19: Long-Term Financial Planning

A planner's percentage of sales model forecasts that sales will grow by 20% next year.If costs of goods sold are proportionate at 70% of sales,then costs of goods sold will:

Financial planning models routinely adjust for present value and risk.

To avoid inconsistency,financial planners should be sure to:

Financial planning is a process of deciding which risks to take.

Financial planning should attempt to minimize risk.

Comebaq Computers is aiming to increase its market share by slashing the price of its new range of personal computers.Are costs and assets likely to increase or decrease as a proportion of sales? Explain.

What are the possible choices of balancing items when using a financial planning model? Discuss whether some are generally preferable to others.

If a firm's dividend payout ratio is determined after achieving a specific capital structure,then:

Financial plans will succeed only if the forecasts are perfect.

Financial planning is concerned with possible surprises as well as the most likely outcomes.

A common,long-term corporate financial planning horizon would stretch for 15 to 20 years.

Which of the following would be most likely included as inputs to a firm's financial plan?

In a financial planning model:

Percentage of sales models usually assume that costs,fixed assets,and working capital all increase at the same rate as sales.When do you think that these assumptions do not make sense? Would you feel happier using a percentage of sales model for short-term or long-term planning?

The dividend payout ratio is directly related to a firm's internal growth rate.

Financial managers should be trained early in their careers to question financial forecasts.

Which of the following does not provide a "solution" to a projected growth rate in assets that exceeds the sustainable growth rate?

What amount of debt should a firm include in its financing mix in order to achieve a sustainable growth rate of 9% while maintaining a 40% dividend payout,a 10% profit margin,and an asset turnover of 1.5?

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

The observation that additions to fixed assets are "lumpier" than additions to current assets indicates that:

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