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F. Marston, Inc. has occurred a forecasting model to estimate its AFN for the upcoming year. All else being equal, which of the adhering to components is most likely to result in a rise of the additional funds needed (AFN)?a. A switch to a just-in-time inventory system and also outsourcing production.b. The agency reduces its dividfinish payout proportion.c. The agency switches its materials purchases to a supplier that sells on terms of 1/5, net 90, from a supplier whose terms are 3/15, net 35.d. The agency discovers that it has actually excess capacity in its solved assets.e. A sharp rise in its forecasted sales.
The term "extra funds required (AFN)" is mostly identified as follows:a. Funds that a firm need to raise externally from non-spontaneous sources, i.e., by borrowing or by marketing brand-new stock to support operations.b. The amount of assets compelled per dollar of sales.c. The amount of internally produced cash in a offered year minus the amount of essential to obtain the new assets needed to support development.d. A forecasting approach in which the forecasted portion of sales for each balance sheet account is held constant.e. Funds that are acquired instantly from regimen company transactions.
The resources intensity proportion is generally characterized as follows:a. The percent of liabilities that boost spontaneously as a percentage of sales.b. The ratio of sales to current assets.c. The ratio of present assets to sales.d. The amount of assets forced per dollar of sales, or A0*/S0.e. Sales separated by complete assets, i.e., the full assets turnover ratio.
Which of the adhering to is NOT one of the measures taken in the financial planning process?a. Monitor operations after implementing the setup to spot any type of deviations and also then take corrective actions.b. Determine the amount of resources that will be required to assistance the setup.c. Develop a collection of forecasted financial statements under alternate versions of the operating plan in order to analyze the results of various operating measures onprojected revenues and financial ratios.d. Consult via crucial competitors about the optimal collection of prices to charge, i.e., the prices that will certainly maximize profits for our firm and its competitors.e. Foreactors the funds that will certainly be generated internally. If internal funds are inenough to cover the forced new investment, then recognize resources from which the compelled outside resources can be raised
Spontaneous funds are mostly identified as follows:a. A forespreading technique in which the forecasted percent of sales for each item is organized consistent.b. Funds that a firm need to raise externally with momentary or permanent borrowing and/or by marketing new common or desired stock.c. Funds that aclimb out of normal organization operations from its providers, employees, and the government, and also they include prompt increases in accounts payable,accrued weras, and also accrued taxes.d. The amount of cash raised in a provided year minus the amount of cash required to finance the extra funding expenditures and working funding needed to supportthe firm"s growth.e. Assets required per dollar of sales.
Which of the complying with statements is CORRECT?a. The first, and possibly the many instrumental, step in forespreading financial demands is to forecast future sales.b. Forecasted financial statements, as questioned in the message, are used generally as a part of the managerial compensation routine, wbelow management"s historicalperformance is evaluated.c. The resources intensity proportion offers us an idea of the physical problem of the firm"s addressed assets.d. The AFN equation produces more exact forecasts than the forecasted financial statement method, especially if resolved assets are lumpy, economic situations of range exist,or if excess capacity exists.e. Perhaps the the majority of necessary action once arising forecasted financial statements is to recognize the breakdown of common equity between commonstock and also preserved earnings.
Which of the adhering to statements is CORRECT?a. Suppose a firm is operating its resolved assets at below 100% of capacity, yet it has actually no excess current assets. Based on the AFN equation, its AFN will be bigger than if it had actually been operating with excess capacity in both solved and also existing assets.b. If a firm retains all of its revenue, then it cannot need any extra funds to support sales growth.c. More funds necessary (AFN) are commonly increased utilizing a combination of notes payable, irreversible debt, and prevalent stock. Such funds are non-spontaneous inthe sense that they require explicit financing decisions to achieve them.d. If a firm has a positive cost-free cash flow, then it have to have actually either a zero or a negative AFN.e. Because accounts payable and accrued liabilities have to inevitably be paid off, as these accounts rise, AFN as calculated by the AFN equation must also boost.
Which of the complying with statements is CORRECT?a. The AFN equation for forespreading funds demands calls for only a forecast of the firm"s balance sheet. Although a forecasted earnings statement may assist clarifythe results, revenue statement information are not essential because funds required relate only to the balance sheet.b. Dividends are passist with cash taken from the built up kept earnings account, hence dividfinish policy does not affect the AFN foreactors.c. A negative AFN indicates that maintained revenue and spontaneous liabilities are far more than enough to finance the added assets essential.d. If the ratios of assets to sales and spontaneous liabilities to sales perform not reprimary continuous, then the AFN equation will certainly administer even more specific forecasts than the forecasted financial statements approach.e. Any forecast of financial requirements involves determining exactly how much money the firm will require, and this need is figured out by adding together boosts inassets and spontaneous liabilities and then subtracting operating revenue.
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Which of the adhering to statements is CORRECT?a. If a firm"s assets are thriving at a positive rate, however its preserved revenue are not increasing, then it would certainly be impossible for the firm"s AFN to be negative.b. If a firm rises its dividend payout proportion in anticipation of greater earnings, yet sales and also revenue actually decrease, then the firm"s actual AFN must, mathematically, exceed the formerly calculated AFN.c. Higher sales generally require greater asset levels, and also this leads to what we call AFN. However before, the AFN will be zero if the firm chooses to retain all of its revenues, i.e., to have actually a zero dividend payout ratio.d. Dividfinish plan does not affect the requirement for exterior funds based on the AFN equation.e. The sustainable growth price is the maximum achievable development rate without the firm having actually to raise external funds. In other words, it is the development price at which the firm"s AFN equals zero.
Online Learning Center to acagency Essentials of Investments8th EditionAlan J. Marcus, Alex Kane, Zvi Bodie
the rate on a securitized ascollection pool - such as a MBS - that is "passed-through" to investors as soon as monitoring fees and also guarantee fees have been paid to the securitizing corporation
The actuary"s estimate of the current worth of the total retirement benefits earned so much by employees, using the pension formula utilizing approximated future compensation levels