1. When long-term financial planning efforts set cash as a percentage of sales or as a fixed dollar amount for planning purposes, the projected cash flow statement is said to be a ____ forecasting statement.

a. dynamic

b. passive

c. conservative

d. checking

2. If a venture has a return on assets (ROA) = 10%, an equity multiplier based on beginning equity = 3.5 times, and a retention rate = 50%, the sustainable growth rate would be:

a. 10%

b. 17.5%

c. 35%

d. 40%

e. 20.5%