A firm's net working capital and all of its expenses vary directly with sales. The firm is operating currently at 96 percent of capacity. The firm wants no additional external financing of any kind. Which one of the following statements related to the firm's pro forma statements for next year must be correct?
A- the firm cannot exceed its internal rate of growth.
B. The maximum rate of sales increase is 4 percent.
C. The projected owners' equity will equal this year's ending equity balance
D. Total liabilities will remain constant at this year's value.
E. Fixed assets must remain constant at the current level.

Answer rating: 100% (QA)

Correct answer A the firm cannot exceed its internal rate of growth Explanatio... View the full answer