Corporate Finance chapter 1-4 test study guide Questions and Answers Grade A+ 2023

Which one of the following is correct in relation to pro forma statements? a. Net working capital is affected only when a firm's sales are expected to exceed the firm's current production capacity b. Long-term debt varies directly with sales when a firm is currently operating at maximum capacity c. Fixed assets must increase if sales are projected to increase d. The addition to retained earnings is equal to net income plus dividends paid e. Inventory changes are directly proportional to sales changes - -E. Inventory changes are direcly propotional to sales changes -9. You are getting ready to prepare pro forma statements for your business. Which one of the following are you most apt to estimate first as you begin this process? a. current assets b. projected net income c. fixed assets d. external financing need e. sales forecast - -E. Sales Forecast