midb - Midterm Examination: Business 312 Evening Section...

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Midterm Examination: Business 312 Evening Section Instructions: For qualitative questions, point form is not an acceptable answer. Do all questions in your answer booklet. Answers on this question sheet or other scrap paper will not be marked. 1. (10 marks) Other things equal , what effect will the following independent changes in the characteristics of a firm have on incremental short term debt financing required by a firm at the end of a planning period (or repayment of short term debt). In an actual firm, the effect of these changes might be identified by using a set of projected financial statements. (i) an increase in contribution margin per dollar sales. (ii) a decrease in accounts receivable turnover. (iii) an increase in asset turnover. (iv) an increase in the depreciation charge which a firm uses for financial statement purposes for its existing net fixed assets (capital cost allowances are unchanged). In this question, you must explain your response in order to receive marks. Note that the above changes are independent, and therefore, separate responses are required for each part of this problem. 2.
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midb - Midterm Examination: Business 312 Evening Section...

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