Assuming they use the percentage of sales method

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Gerentology Associates, a highly profitable company, is considering 2 growth stategies, one that will achieve sales growth of 20% in one year, and the other that will achieve 20% growth in sales but over a 4 year time frame. Assuming they use the percentage of sales method, which of the following statements is true?

A-Discretionary financing needed will be much greater for the 4 year growth strategy.

B-Discretionary financing needed could be much less for the 4 year growth strategy due to retained earnings.

C-Discretionary financing needed could be much greater for the slow growth strategy because interest charges will accumulate on the company’s debt.

D-The asset balances at the end of 4 years for strategy 2 will be much greater than the asset balances required at the end of year one for strategy one.

Reference no: EM131087789

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