FIN 571 Week 6 Individual Practice Quiz

Multiple Choice Question 55

Planning models that are more sophisticated than the percent of sales method have
a) working capital accounts like inventory, accounts receivables, and accounts payables vary directly with sales.
b) fixed assets that do not always vary directly with sales.
c) all of these are true.
d) all variable costs change directly with sales.

Multiple Choice Question 66

Firms that achieve higher growth rates without seeking external financing
a) have less equity and/or are able to generate high net income leading to a high ROE.
b) are not highly leveraged.
c) all of these are true.
d) have a high plowback ratio.

Multiple Choice Question 85

External financing needed: Triumph Company has total assets worth $6,413,228. Next year it expects a net income of $3,145,778 and will pay out 70 percent as dividends. If the firm wants to limit its external financing to $1 million, what is the growth rate it can support?
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