Asked by Christopher Roney on Jul 02, 2024
Verified
An important reason for making financial projections is forecasting whether the firm will need money from outside sources in the coming year. If the planning assumptions result in a need for extra money, it shows up in the plan as:
A) a negative net income.
B) a negative equity account.
C) an increase in debt.
D) a very substantial drop in revenue.
Planning Assumptions
The set of hypotheses upon which a plan or strategy is built, regarding future market conditions, costs, or other factors.
Negative Net Income
A financial situation where a company's total expenses exceed its revenues, leading to a loss.
Extra Money
Extra money refers to funds that are available beyond what is needed for regular expenses, savings, or immediate commitments.
- Absorb the significance of financial planning decisions in determining a firm's need for funds from outside sources.
Verified Answer
Learning Objectives
- Absorb the significance of financial planning decisions in determining a firm's need for funds from outside sources.
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