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Author Question: If a firm's production process requires high operating leverage (use of fixed costs), then the firm ... (Read 222 times)

ts19998

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If a firm's production process requires high operating leverage (use of fixed costs), then the firm
  should finance its assets with debt, so that the cost of capital will be reduced and financing costs
  will remain fixed.
 
  Indicate whether the statement is true or false

Question 2

Using the percentage of sales method, forecasted retained earnings balance is equal to
 
  A) the ratio of retained earnings to sales for the current year multiplied by projected sales for
  next year, minus dividends paid.
  B) the retained earnings balance for the current year as no changes are made to this financing
  account when using the percent of sales method.
  C) prior year retained earnings plus projected net income less projected dividends.
  D) the ratio of retained earnings to sales for the current year multiplied by projected sales for
  next year.


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Meganchabluk

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ts19998

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Reply 2 on: Jul 10, 2018
Excellent


kswal303

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Reply 3 on: Yesterday
:D TYSM

 

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