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Multiple Choice Quiz
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1

Aggregation refers to the process by which a firm first projects its aggregate investment requirement, then it breaks that total up and allocates it to the investment proposals of the firm's smaller units.
A)True
B)False
2

With good financial planning, managers can be less vigilant in their day to day management of the firm.
A)True
B)False
3

All else equal, a firm that utilizes assets inefficiently will have a higher sustainable growth rate than a firm that does not.
A)True
B)False
4

One would expect the capital intensity ratio of an auto manufacturing firm to be lower than that of a software development firm.
A)True
B)False
5

In most industries, planning beyond the period of one year is not very useful.
A)True
B)False
6

Financial planning is important because the only way for a firm to prosper is for it to grow.
A)True
B)False
7

One of the first things needed when constructing a financial plan is a sales forecast.
A)True
B)False
8

All else equal, the lower the forecasted growth the larger the level of external financing needed.
A)True
B)False
9

A firm with a positive ROE could have a negative ROA.
A)True
B)False
10

All else equal, an increase in a firm's capital intensity ratio will increase its external financing needed.
A)True
B)False





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