1. (Financial forecasting) Which of the following accounts would most likely vary directly with the level of firm sales? Provide a brief explanation of each.

	Yes	No
Cash	_____	_____
Notes payable	_____	_____
Marketable securities	_____	_____
Plant and equipment	_____	_____
Accounts payable	_____	_____
Inventories	_____	_____

2. Classify each of the investments in assets as either permanent or temporary (explain):

a) A seasonal increase in a card shops inventory of Valentine cards.

b) The acquisition of a new forklift truck that is expected to have a useful life of five years.

c) An increase in accounts receivable resulting from an expansion in the firms customer base.