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84. What is the internal growth rate for a firm with an ROE of 20%, a dividend payout ratio of
40%, and an equity-to-debt ratio of 60%?
85. Which one of the following does
not
provide a "solution" to a projected growth rate in
assets that exceeds the sustainable growth rate?
86. All of the following are part of the financial planning process
except
:
87. Which one of these is least apt to change proportionally with sales?
88. A firm's internal growth rate is all of the following
except
:
89. A financial plan:
90. In the percentage of sales model, which one of these is
least
apt to increase in a linear
fashion as sales increase?
91. Which one of these best describes the relationship between net working capital (NWC)
and sales?
92. A forecast using a percentage of sales model expects sales to increase by 5% annually
over the next 4 years. If all costs are proportional to sales at 80%, and this year's net income is
$1,250, the net income in the fourth year will be:
93. If a firm's sales increase by 12%, and it has no spare capacity, it must increase fixed
assets by at least:
94. With respect to the balance sheet, an increase in equity of $2,000 with an increase in net
income to $2,500, leads us to believe:
95. Sources and uses of funds are made equal through:
96. Which one of the following statements regarding financial planning models is false?
97. Which one of the following is
not
an output of a financial plan?
98. If a firm does not want to use either dividends or debt as its balancing item, then it is
most apt to use _____ for that purpose.
99. A firm has projected sales of $328,000, costs of goods sold equal to 68% of sales, interest
of $18,500, a tax rate of 35%, and a dividend payout ratio of 60%. What will be the addition to
retained earnings?
100. Assume a firm wants to hold its current long-term debt-to-equity ratio constant at 0.55
and its payout ratio constant at 35%. The firm neither issues nor repurchases shares. If the firm
generates $326,000 of net income, what is the maximum amount that the firm can increase its
long-term debt?
101. A firm's net assets equal 55% of sales. The firm expects a sales increase of $78,000 next
year with $6,500 of that amount reinvested in the firm. What is the external financing need?
102. What are the possible choices of balancing items when using a financial planning model?
Discuss whether some are generally preferable to others.
103. 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.
104. 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?
