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If a Firm Uses External Financing as a Plug Item,has

Question 17

Multiple Choice

If a firm uses external financing as a plug item,has a new capital budget of $2 million,a net income of $3 million,and a plowback ratio of 40%,how much should be raised in external funds?


A) $200,000
B) $600,000
C) $800,000
D) $1,200,000

Correct Answer:

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