e. All of the statements above are correct.
MULTIPLE CHOICE QUESTIONS 6. On the basis of historical relationships between its balance sheet items and its sales, profit margin, and dividend policy, Thode Corporation’sanalysts have graphed the relationship of additional funds needed (on the Y-axis) to possible growth rates in sales (on the X-axis). If Thode decides to increase the percentage of earnings paid out as dividends, which of the following changes would occur in the graph?
MULTIPLE CHOICE QUESTIONS 7. Considering each action independently and holding other things constant, which of the following actions would reduce a firm’sneed for additional capital?
8. Jill has just invented a non-slip wig for men that she expects will cause sales to double from $10,000 to $20,000, increasing net income to $1,000. She feels that she can handle the increase without adding any fixed assets. (1) Will Jill need any outside capital if she pays no dividends? (2) If so, how much? MULTIPLE CHOICE QUESTIONS Cash $ 800 Accts. pay. & accruals $ 500 Accounts rec. $ 450 Notes payable $ 2,000 Inventories $ 950 Total CL $ 200 Total CA $2,200 L-T debt $ 26,000
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