Swings in discretionary financing needed can be caused by
A)firm profitability.
B)the growth rate of sales.
C)the need to upgrade technology and physical assets from time to time.
D)all of the above.

Question

Quizplus · Accepted Answer

Profitability affects the amount of internal funds available for investments or capital expenditures, which could reduce or increase the need for discretionary financing. The growth rate of sales affects the need for additional capital to fund inventory, accounts receivable or other working capital needs. Finally, the need to upgrade technology and physical assets from time to time can require a large amount of capital expenditure in a short period, leading to swings in discretionary financing needed.

Swings in Discretionary Financing Needed Can Be Caused by