Which of the following will decrease the additional funds needed from external sources?
A) The firm's profit margin decreases.
B) The firm's retention ratio is decreased.
C) The firm becomes less capital intensive.
D) The firm reduces its usage of trade credit.

Question

Quizplus · Accepted Answer

When a firm becomes less capital intensive, it means it is using its assets more efficiently or reducing the amount of investment in assets for generating sales. This can lead to a decrease in the need for additional funds from external sources, as the firm can generate more revenue with less investment in assets.

Which of the Following Will Decrease the Additional Funds Needed