Intermediate Financial Management 11th Edition by Eugene F. Brigham – Test Bank

Intermediate Financial Management 11th Edition by Eugene F. Brigham – Test Bank

ISBN-10:1111530262 · ISBN-13:978-1111530266

Various Choice: True/False

(9.1) Mission assertion F Okay Reply: a EASY
. The mission assertion is a press launch of the company’s whole operate.

a. True
b. False

(9.1) Firm strategies F Okay Reply: b EASY
. As quickly as a company has outlined its operate, scope, and objectives, it ought to develop a way for reaching its targets. Firm strategies are detailed plans reasonably than broad approaches.

a. True
b. False

(9.2) Product sales forecast F Okay Reply: a EASY
. The first, and most important, step in establishing a set of forecasted financial statements is the product sales forecast.

a. True
b. False

(9.2) Product sales forecast F Okay Reply: a EASY
. A typical product sales forecast, though concerned with future events, will typically be based mostly totally on newest historic traits and events along with on forecasts of monetary prospects.

a. True
b. False

(9.2) Product sales forecast F Okay Reply: b EASY
. Errors inside the product sales forecast will likely be offset by associated errors in costs and income forecasts. Thus, as long as the errors aren’t huge, product sales forecast accuracy is not vital to the correctly being of the company.

a. True
b. False

(9.3) Spontaneous liabilities F Okay Reply: a EASY
. As a company’s product sales develop, its current belongings moreover generally tend to increase. For example, as product sales improve, the company’s inventories normally improve, and purchases of inventories result in additional accounts payable. Thus, spontaneous liabilities that reduce AFN come up from transactions launched on by product sales will enhance.

a. True
b. False

(9.3) Spontaneous liabilities F Okay Reply: b EASY
. Corporations pay a low fee of curiosity on spontaneous liabilities so these funds are its most cost-effective provide of capital. Consequently, the company must make preparations with its suppliers to utilize as lots of this credit score rating as attainable.

a. True
b. False

(9.3) Spontaneous liabilities F Okay Reply: a EASY
. A company will use spontaneous funds to the extent attainable; however, ensuing from credit score rating phrases, contracts with workers, and tax authorized tips there’s little flexibility of their utilization.

a. True
b. False

(9.3) Addition to ret. earnings F Okay Reply: a EASY
. As long as a company does not pay out 100% of its earnings, the company’s annual income that is retained inside the enterprise (i.e., the addition to retained earnings) is one different provide of funds for a company’s development.

a. True
b. False

(9.3) Asset improve F Okay Reply: a EASY
. A quick build-up of inventories normally requires additional financing, till the rise is matched by an equally huge decrease in one other asset.

a. True
b. False

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