2016 Actual Results Addition to retained earnings Eamings before taxes Taxes Eamings before interest and taxes Depreciation Fixed operating costs except depreciation Interest Number of common shares (millions) Dividends per share Common dividends Gross profit Net income Net sales Eamings per share Cost of goods sold $455 $1,650 (650) $1,950 (300) (750) (300) 20.0 $27 (535) $3,000 $990 $15,000 $50 (12,000) 2017 Initial Forecast $689 $2,040 (816) $2,340 (360) (900) (300) 20.0 $27 (535) $3,600 1,224 $18,000 $61 (14,400) Which of the following are assumptions made by the initial income statement forecast? Check all that apply. Saltwater Logistics Corp. will be issuing additional shares of common stock in the coming year. Spontaneously generated funds will sufficiently cover any financing needs. Saltwater Logistics Corp. will be issuing additional debt in the coming year. No excess capacity currently exists. The forecasted increase in net sales is 20%. The cost of sales percentage for Saltwater Logistics Corp. will decrease due to economies of scale. Which of the following could be a direct cause of financing feedback? I. Issuing additional common stock II. Purchasing additional buildings with internally generated funds III. An unexpected increase in sales IV. Borrowing from the bank o III I O III and IV II and IV O I and IV O I and II O IV O II what is one of the potential consequences of financing feedback that might cause the actual financing needs to be higher than initially thought? Financing feedback might: Spontaneously increase liabilities associated with the cost of goods sold O Reduce the level of cash on hand Increase the length of the operating cycle Increase charges against net income, reducing the amount of available internally generated funds