131.Sales forecasts are:I. frequently based on macroeconomic projections.II. often affected by industry forecasts.III. generally the output from most pro forma statements.IV. generally the basis for projecting future asset requirements. A. I and II onlyB. III and IV onlyC. II and III onlyD. I, II, and III onlyE. I, II, and IV only 132.When constructing a pro forma statement, net working capital generally varies: 133.When fixed assets on a pro forma statement are projected to increase at a rate equivalent to the projected rate of sales growth, it can be assumed that the firm is: 134.A firm is currently operating at full capacity. Net working capital, costs, and all assets vary directly with sales. The firm does not wish to obtain any additional equity financing. The dividend payout ratio is constant at 40 percent. When the firm compiles a pro forma statement, the plug variable is most likely going to be:
135.The composition of the liability and equity sections of a pro forma statement depend most heavily on a firm's: A. net working capital policies.B. financing and dividend policies.C. desired level of liquidity.D. capital budgeting and working capital policies.E. level of capacity utilization and net working capital policy. 136.You are comparing a current income statement and a pro forma income statement for a firm. The pro forma statement reflects a 7% rate of growth. Both income statements include a common-size statement. The firm is currently operating at 80 percent of its capacity. On the pro forma statement, all costs increase at the same rate as sales. Given this,
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