Question

Which one of the following statements concerning financial planning for a firm is correct?

Group of answer choices

Financial plans often contain frequently conflicting goals

The financial process is based on a single set of economic assumptions

Financial plans assume that firms obtain no external financing

Financial planning for fixed assets is done on a segregated basis within each division

Financial plans often contain alternative options based on projected economic developments

The Dog House has net income of $3,450 and total equity of $8,600. The payout ratio is 60%. What is the sustainable growth rate?

Group of answer choices

39.94%

21.29%

14.47%

19.11%

Answer 1

The statement that seems to be correct out of these is :-

1.) Financial plans often creates alternative options based on projected economic development. This is because there are many financial alternates created during the time including :- whether to continue the same project, whether to expand the devision, raise more financing etc.

The other options seem to be incorrectly stated.

2. The answer to the question as per sustainable growth formula should be 16.04 % as per the

Sustainable growth formula = RETENTION ratio × ROE

Roe = net income/ total equity

So (3450/8600 ) ×0.4 = 16.05 %

Let me know if i am missing out on anything

The closest answer is 14.47 %

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