Answer:
No it will not, the statement is incorrect.
Explanation:
if the firm is making a profit, then it means it is growing, so we must determine the firm's growth rate:
firm's growth rate = return on assets (ROA) x (1 - dividends paid)
since we are not given ROA, we must calculate it first:
ROA = net profit x asset turnover = 6% x 2 = 12%
now we go back, firm's growth rate = return on assets (ROA) x (1 - dividends paid) = 12% x (1 - 40%) = 12% x 0.6 = 7.2%
The firm can manage to support an annual growth rate of up to 7.2% before it needs to borrow money or issue new stocks.
The current disposable income held to buy consumption goods in the future is referred to as saving.
Consumables are goods that are best suited for their end use. In other words, the end-user of consumer goods is the consumer themselves, and capital goods are the goods used to manufacture consumer goods.
Common examples include food, drink, clothing, shoes, and gasoline. Consumer services are usually intangible products or actions that are produced and consumed simultaneously.
Learn more about consumption goods here
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