Which one of the following is true?O The change in cash position is a linear relationship to production.O As the level of inventory increases, the required sales growth increases.If the sales are lower than the sales growth break-even point, the firm will run out of working capital.O As the level of inventory increases, the required sales growth decreases.

There is no direct relation with growth sales and inventory level if production rates are compared…

Answered: Which one of the following is true? O…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter23: Other Topics In Working Capital Management

Section: Chapter Questions

Problem 3Q

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If a firm decreases its operating costs, all else constant, then the: A. profit margin will decrease.B. return on assets will decrease.C. total asset turnover rate will increase.D. cash coverage ratio will decrease.E. price-earnings ratio will decrease Can you give me detailed explanation?
Suppose a company increases the price of its product and demand hardly declines.which of the following will increase? A) profit margin B) return - on - equity C) taxes D) all the above
Which one of the following statements is correct? A. If a firm decreases its inventory period, its accounts receivable period will also decrease. B. The longer the cash cycle, the more cash a firm typically has available to invest. C. A firm would prefer a negative cash cycle over a positive cash cycle. D. Decreasing the inventory period will also decrease the payables period. E. Both the operating cycle and the cash cycle must be positive values.
. If the company reduces its DSO without seriouslyaffecting sales, what effect would this have onfree cash flow (1) in the short run and (2) in thelong run?
Suppose a company’s return on invested capital is less than itsWACC. What happens to the value of operations if the salesgrowth rate increases? Explain your answer.
Which of the following statements is not correct? The higher the sales growth rate g is, the larger AFN will be—other things held constant. The higher the capital intensity ratio, the larger AFN will be—other things held constant. The higher the firm’s spontaneous liabilities, the smaller AFN will be—other things held constant. The higher the payout ratio, the smaller AFN will be if other things held constant.
Suppose a company’s return on invested capital is less than itsWACC. What happens to the value of operations if the salesgrowth rate increases?
suppose a company's return on invested capital is less than its wacc. what happens to the value of operations if the sales growth increases? Explain your answer
3. If inventory turnover decreases, what will happen to the cash conversion cycle? Assume other variable are held constant. Support your answer with example. How EOQ can reduce Inventory cost?
An increase in a firm's expected growth rate would cause its required rate of return to O a. fluctuate less than before. O b. increase. c. decrease. d. possibly increase, possibly decrease, or possibly remain constant. O e. fluctuate more than before.
NEED ASAP. THANK YOU!! 1. Which of the following statements is correct? Group of answer choices - Higher sales usually require higher asset levels, and this leads to what we call AFN. However, the AFN will be zero if the firm chooses to retain all of its profits, i.e., to have a zero dividend payout ratio. - If a firm’s assets are growing at a positive rate, but its retained earnings are not increasing, then it would be impossible for the firm’s AFN to be negative. - Dividend policy does not affect the requirement for external funds based on the AFN equation. - AFN is not always positive. - If a firm increases its dividend payout ratio in anticipation of higher earnings, but sales and earnings actually decrease, then the firm’s actual AFN must, mathematically, exceed the previously calculated AFN.2. When we use the AFN equation to forecast the additional funds needed (AFN), we are implicitly assuming that all financial ratios are constant. Group of answer choices - True…
Cash Conversion Cycle. Will each of the followingevents increase or decrease cash conversion cycles?(LO2)A-Higher financing rates induce the firm to reduceits level of inventory. b.The firm obtains a new line of credit that enablesit to avoid stretching payables to its suppliers.c-The firm factors its trade receivables.d-A recession occurs andthe firm's customersincreasingly stretch their payables.e.The new production process shortens the timeneeded to manufacture products.

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