1.

2. (a. additional funds needed, b. alternative fiduciary necessities, c. added fair needs, d.additional financing needed)

2016 Actual Results 2017 Initial Forecast $19,200 (15,360) $3,840 (960) (384) $2,496 Net sales $16,000 Cost of goods sold (12,800) Gross profit $3,200 Fixed operating costs except depreciation (800) Depreciation (320) Earnings before interest and taxes $2,080 Interest (320) Earnings before taxes $1,760 Taxes (704) Net income $1,056 Common dividends (570.24) Addition to retained earnings $485.76 Earnings per share $52.8 Dividends per share $28.512 Number of common shares (millions) 20.0 (320) $2,176 (870.4) 1,305.6 (570.24) $735.36 $65.28 $28.512 20.0 Which of the following are assumptions made by the initial income statement forecast? Check all that apply. No excess capacity currently exists. O Green Rabbit Transportation Inc. will be issuing additional debt in the coming year, O Green Rabbit Transportation Inc. will be issuing additional shares of common stock in the coming year, The cost of sales percentage for Green Rabbit Transportation Inc. will decrecha due to economies of scale. Spontaneously generated funds will sufficiently cover any financing needs. The forecasted increase in net sales is 20%. If Green Rabbit Transportation Inc. had neither a sufficient amount of excess capacity to handle forecasted increases in operations nor the level of retained earnings required to increase asset levels up to the necessary level for production, this difference would be referred to as and could be acquired in which of the following forms? 1. Issuing additional common stock 11. Borrowing from a bank using notes payable III. Issuing long-term bonds I and 11 Just III Just 11 It and O 1, 11, and III I only