External financing as a plug item
Problem: If a firm uses external financing as a plug item, has a new capital budget of $3 million, a net income of $4 million, and a plowback ratio of 35%, how much should be raised in external funds?
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If a firm uses external financing as a plug item, has a new capital budget of $3 million, a net income of $4 million, and a plowback ratio of 35%, how much should be raised in external funds?
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Why can the distinction between fixed costs and variable costs be made in the short run? Distinction between fixed costs and variable costs can be made in the short run because a change in degree can be made.
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