Quiz Ch 18 – Net Working Capital (NWC) and Its Relationship with Sales
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
How can the relationship between net working capital (NWC) and sales be best described?
How can the relationship between net working capital (NWC) and sales be best described?
Which element is prone to experience irregular increases as sales expand within the percentage of the sales model?
What will happen to the cost of goods sold if sales revenues are expected to increase by 20% next year in a percentage-of-sales model where the cost of goods sold is projected to stay at 80% of sales?
Which is NOT a common rationale for the development of financial plans?
What is the primary function of a financial plan?
Why do planners frequently suggest entering a market for ‘strategic’ motives?
True or false: Within a financial planning model, balancing items are dynamic variables that are adjusted to maintain the model’s consistency. These components are commonly known as ‘plugs’.
True or false: Financial planning gives priority to the broader perspective.
True or false: Financial planning models should incorporate a high level of detail.
True or false: Debt can serve as a flexible element in financial planning, used as a ‘plug item’ when needed.