In Using A Systems Approach To Financial Planning, It Is Necessary To Develop A

38.In using a systems approach to financial planning, it is necessary to develop a forma income statement.

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D.All of the options.




39.The key initial element in developing all pro forma statements is 



A.a cash budget. income statement.


C.a sales forecast.


D.a collections schedule.




40.In the development of the pro forma financial statements, the last step in the process is the development of the budget. forma balance sheet. forma income statement. budget.




41.Depending upon the state of the economy, Ables Manufacturing Corp. expects to sell the following number of prefabricated buildings. The probability of each state is indicated. What is the expected value of the total sales projection?











D.None of the options.




42.In developing the pro forma income statement, we follow four important steps:


1) Compute other expenses.

2) Determine a production schedule.

3) Establish a sales projection.

4) Determine profit by completing the actual pro forma statement.

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What is the correct order for these four steps? 












43.Pro forma financial statements are 



A.the most comprehensive means of financial forecasting.


B.often required by prospective creditors.


C.projections of financial statements for a future period.


D.All of the options.




44.A rapid rate of growth in sales may require 



A.higher dividend payments to shareholders.


B.increased borrowing by the firm to support the sales increase.


C.the firm to be more lenient with credit customers.


D.sales forecasts to be made less frequently.




45.Required production during a planning period will depend on the 



A.beginning inventory of products.


B.sales during the period.


C.desired level of ending inventory.


D.All of the options.




46.XYZ Co. has forecasted June sales of 400 units and July sales of 700 units. The company maintains ending inventory equal to 125% of next month's sales. June beginning inventory reflects this policy. What is June's required production? 



A.750 units


B.0 units


C.775 units


D.425 units


47.In order to estimate production requirements, we 



A.add beginning inventory to projected sales in units and subtract desired ending inventory.


B.add projected sales in units to desired ending inventory and subtract beginning inventory.


C.add beginning inventory to desired ending inventory and divide by two.

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D.add beginning inventory to desired ending inventory and subtract projected sales in units.


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