1 . Which of the following is not part of financial planning? a) Analyzing the investment and financing choices open to the firm b) Projecting the future consequences of current decisions c) Deciding which alternatives to undertake d) Measuring performance against the goals set out in the financial plan e) Selecting alternatives to minimize risk

2. A balance item is usually needed to complete the financial planning forecasts because: 1. the sales growth rate exceeds the sustainable growth rate. 2. sources and uses of funds are made equal. 3. assets must equal the sum of liabilities and equity. 4. All of the answers are correct. 5. None of the answers are correct.

3. Which of the following items cannot be used as the balancing item in the pro forma statements? 1. Dividends 2. Assets 3. Debt 4. Equity 5 All of the choices can be used as the balancing item

4. The sustainable growth rate is the maximum rate at which a firm can grow: 1 without requiring external financing. 2 without changing its leverage ratio. 3 without increasing its assets. 4 by plowing all earnings back into the firm. 5 with no restrictions.

5. Which of the following is an output of the financial plan? 1 Pro forma statements 2 Equations specifying key relationships 3 Forecasts about the future 4 A percentage-of-sales model 5 The goals of the firm