a. Which of the following statements is CORRECT? Perhaps the most important step when developing forecasted financial statements is to determine the breakdown of common equity between common stock and retained earnings. b. The first, and perhaps the most critical, step in forecasting financial requirements is to forecast future sales. Forecasted financial statements, as discussed in the text, are used primarily as a part of the managerial compensation program, where management's historical performance is evaluated. d. Once Expected Sales are higher than Capacity Sales a company should always purchase new machinery. The EFN equation is not very accurate if the Profit Margin does not stay constant. c. e. a. You want $15,000 3 years from now, while you have saved $12,500 in a savings account that pays 8 percent interest, compounded semi-annually. What are the semi-annual cash-flows associated with this situation? Zero. b. You need to add $123.10 each half year to the account. c. You can withdraw $123.10 each half year from the account. d. You need to add $659.21 each half year to the account. You can withdraw $659.21 each half year from the account. e. a. Sadik Incs bonds currently sell for $1,180. They pay a $105 annual (not semi-annual) coupon and have a 15-year maturity, but they can be called in 5 years at $1,100. What is their yield to call (YTC)? 6.63% b. 6.98% c. 7.35% d. 7.74% 8.12% e. Which of the following is a return of capital: a. ROE b. Dividends c. Interest d. Preferred Stock Dividends e. Proceeds of an IPO How much would $20,000 due in 50 years be worth today if the discount is 7.5%? a. $438.03 b. $461.08 c. $485.35 d. $510.89 e. $537.78