company is operating at full capacity, fixed assets are excluded in the computation of the amount of external funds needed b. Additions to retained earnings varies upon on the profit margin ratio and retention ratio of the firm c. Growth rate is irrelevant because it seem to be fluctuating every year d. Additional financing needed only p
company is operating at full capacity, fixed assets are excluded in the computation of the amount of external funds needed b. Additions to retained earnings varies upon on the profit margin ratio and retention ratio of the firm c. Growth rate is irrelevant because it seem to be fluctuating every year d. Additional financing needed only p
Chapter12: Corporate Valuation And Financial Planning
Section: Chapter Questions
Problem 2P
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Question
Which of the following is correct when the company is deciding if it will undertake an additional funds needed?
a. When he company is operating at full capacity, fixed assets are excluded in the computation of the amount of external funds needed
b. Additions to retained earnings varies upon on the profit margin ratio and retention ratio of the firm
c. Growth rate is irrelevant because it seem to be fluctuating every year
d. Additional financing needed only pertains to debt financing
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