Building a model for long-term forecasting reveals points in the future where the firm will have ________.
A) excess cash that can be used for dividends, debt repayment, or stock repurchases
B) cash needs that must be funded with external financing
C) a need for expanding property, plant and equipment to meet increases in capacity
D) all of the above

Question

Quizplus · Accepted Answer

Building a long-term forecasting model requires analyzing various factors, such as expected revenue growth, profit margins, asset turnover, capital expenditures, and financing needs. By doing so, the model can reveal points in the future where the firm will have excess cash that can be used for dividends, debt repayment, or stock repurchases, as well as cash needs that must be funded with external financing, or a need for expanding property, plant and equipment to meet increases in capacity. Therefore, all of the above options are correct.

Building a Model for Long-Term Forecasting Reveals Points in the Future