Question

ll Business-US Identitying Borrowing Causes-Post-test Not Attempted -Attempted Bookmarked uses Question (6) A business reports investments on its balance sheet. The amount of long-term investments in corporate bonds has remained stable in dollars and has decreased from 4.5 percent of total assets to 4.0 percent during the past three years. Are these investments a likely borrowing cause for last year? No; the amount of investments has not changed slgnificantly, so they don't represent a borrowing cause Yes; investments are volatile and are often sold at a loss, causing a need to boron. Yes; Inwestmeets obligate the business to provide additional financial support, representing a borrowing cause. O No; The business plans to hold the investments to maturity so they will not represent a borrowing cause until they are sold. Mark for revies Remaning Time 00 3537 Not Atempted Attempted Bookmarked Causes Question (7) Use he excerpts from Lancer's Fumture's finanoial statements shown belo to answer the folawing queston 0Y3 onded ash dhidends 10,000376,000 What is the correct condlusion to draw from the trend in the dividend payout ratio for Lancer's Furniture? O The dividend payout ratio is growing, so the business will most ikely need to borrow leas. The dividend payout ratio is growing, which will most likely lead to increased berrowing needs. The dividend payout ratio is shrinking, which means the business will most likely need to bamrw less. The dividend payout ratio i; shrinkng, "hich nil most likely rwsuit i, increased borro-ing nieds. Mark for review stions: 10 Remaining T083 58 2/2019

Answer 1

6. Option D. No, The Business plans to hold investments to maturity so they will not represent a borrowing cause until they are sold

7. Option B. The DPR is Growing the company may need to borrow because paying more dividends will cause the company to opt for short term financing