1. Which of the following would reduce the additional funds required if all the other things are held constant?
a. An increase in the dividend payout ratio
b. A decrease in the profit margin
c. An increase in the capital intensity ratio
d. An increase in the expected sales growth rate.
e. A decrease in the firm's tax rate.
2. An accrual basis taxpayer may deduct an expense if economic performance has occurred and:
a. the all events test has been met and the amount of the obligation can be determined with reasonable accuracy.
b. the all events test has not been met, but the amount of the payment can be fixed with reasonable accuracy.
c. the all events test has been met, but the amount of the payment cannot be fixed with reasonable accuracy.
e. None of the above.