Define the immediate effect on funds requirements

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Reference no: EM13725191

QUESTIONS 1- Define each of the following terms.

  1. Operating plan, financial plan
  2. spontaneous liabilities, profit margin, payout
  3. Additional funds needed (AFN; AFN equations capital intensity ratios, self-supporting growth rate.
  4. Forecasted financial statement approach using percent of sales
  5. Exceed capacity; lumpy assets; economies of scale full capacity sales target fixed assets/sales ratios required level of fixed assets

QUESTIONS 2- Name five key factors that affect firm's external finance requirements.

QUESTIONS 3- Supost a firm's makes the policy change listed below. If change means that external, nonspontaneous financial requirements (AFN) will increase indicate by a (+); indicate a decrease by a (-); and indicate no affect or an indeterminate effect by a (0).Think in terms of the immediate effect on funds requirements,

a. The dividend payout ratio is increased.

b. The firms decide to pay all suppliers on delivery, rather than after a 30 day delay, to take advantage of discounts for rapid payment.

c. The firm's b begins offer to its customer, whereas previously all sales had been on cash.

d. The firm's profit margin is eroded by increased competition, although sales hold steady.

e. The firm's sells its manufacturing plants for cash to a contractor and simultaneously signs outsourcing contract to purchase from that contractor goods that the firm formerly produced,

k. The firms negotiate a new contract with its union that lowers its labor costs without affecting its output.

Reference no: EM13725191

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