The sustainable growth rate is the maximum growth rate achievable over an extended period of time

Write a two page single spaced summary followed by the answering of the questions included in the book.
July 30, 2019
What is the firm’s expected rate of return?
July 30, 2019

The sustainable growth rate is the maximum growth rate achievable over an extended period of time

In general, the reduction of an asset is a source of funds. True or False

 

==> The sustainable growth rate is the maximum growth rate achievable over an extended period of time. True or False

 

==>The cash conversion cycle is calculated as:

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Days in Inventory + Collection Period

 

Days in Inventory – Payables Period

 

Days in Inventory + Collection Period – Payables Period

 

None of the above

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A company can shorten its cash cycle by:

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Reducing inventory turnover

 

Reducing account payables

 

Reducing days receivable

 

None of the above

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A company has a retention rate of 50%, sales of $25,000, beginning equity of $50,000 and profit margins of 10%, an asset turnover ratio of .75 and debt of $10,000. What is its sustainable growth rate?

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2.5%

 

1.7%

 

3.75%

 

Not enough information given

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Scenario analysis is a way of testing forecasts by changing one assumption at a time.

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True

 

False

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Biases can and should always be eliminated in financial forecasts.

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True

 

False

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Which of the following is commonly used in preparing pro forma statements:

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Historical financial statements

 

Projected sales

 

Efficiency ratios

 

All of the above

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Pro forma statements are:

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Summaries of historical financial statements

 

Government-mandated analyses of financial statements

 

Projected statements used in financial planning

 

Estimated tax liabilities

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Which of the following liabilities form part of a company’s “real” activities?

I. Short-term debt
II. Accounts payable
III. Accrued operating expenses
IV. Long-term debt

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III only

 

II and III

 

I and IV

 

I only

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