Refer to the exhibit. If the profit margin of an organization decreases, and all else remains equal, which of the following describes how the "Funds Needed" line in the graph below will shift?
A.
The "Funds Needed" line will remain pointed upward, but will become less steep.
B.
The "Funds Needed" line will remain pointed upward, but will become more steep.
C.
The "Funds Needed" line will point downward with a minimal slope.
D.
The "Funds Needed" line will point downward with an extreme slope.
When profit margins decrease:
More external funds are required to support the same level of sales growth because internal resources are less available to fund growth initiatives.
This increases the slope of the "Funds Needed" line, making it steeper, as the rate of additional funding required grows faster relative to sales growth.
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emtofid
1 month, 2 weeks ago