amou Case A 1. Calculate forecasted net income using the following: 2017 forecasted sales increase by 10% from 2016 2017 gross profit margin increases by 1% from 2016. All other 2017 income statement items remain the same as those reported in 2016. At this point, you should be able to complete a net income forecast. You can recalculate net income, or you start with 2016 net income and add gross profit changes calculated above. 2. In 2017, the company expects to spend $8,000,000 on new equipment, or capital expenditures. Remember, the financial statements are prepared in 000's. 3. In 2017, the company estimates depreciation expense at $4,500,000. Remember, the financial statements are prepared in 000's 4. Operating assets and liabilities (current assets and current liabilities are not forecasted to change. 5. No long-term debt activity or common stock activity is forecasted. Similar to Forecast Year 2 in Handout 4.5, the forecasted net change in cash is assumed to increase (decrease) the cash balance. 6