Spontaneously generated funds are generally defined as follows: a. Funds that a

Question

Spontaneously generated funds are generally defined as follows:

a. Funds that a firm must raise externally through borrowing or by selling new common or preferred stock.
b. A forecasting approach in which the forecasted percentage of sales for each item is held constant.
c. Assets required per dollar of sales.
d. The amount of cash raised in a given year minus the amount of cash needed to finance the additional capital expenditures and working capital needed to support the firms growth.
e. Funds that arise out of normal business operations from its suppliers, employees, and the government, and they include spontaneous increases in accounts payable and accruals.

Explanation / Answer

e) Funds that arise out of normal business operations from its suppliers, employees, and the government, and they include spontaneous increases in accounts payable and accruals.

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