are the most creative analyst for Green Rabbit Transportation Inc., and your admirers want to see you work ur analytical magic once more. Earnings per share Earnings before taxes Earnings before interest and taxes Interest Fixed operating costs except depreciation Common dividends Gross profit Addition to retained earnings Net income Depreciation Net sales Number of common shares (millions) Taxes Dividends per share Cost of goods sold 2016 Actual Results $53 $1,760 $2,080 (320) (800) (570) $3,200 $486 $1,056 (320) $16,000 20.0 (704) $29 (12,800) 2017 Initial Forecast $65 $2,176 $2,496 (320) (960) (570) $3,840 $736 1,306 (384) $19,200 20.0 (870) $29 (15,360) Which of the following are assumptions made by the initial income statement forecast? Check all that apply. Green Rabbit Transportation Inc. will be issuing additional shares of common stock in the coming year. Spontaneously generated funds will sufficiently cover any financing needs. No excess capacity currently exists. Green Rabbit Transportation Inc. will be issuing additional debt in the coming year. X The forecasted increase in net sales is 20%. The cost of sales percentage for Green Rabbit Transportation Inc. will decrease due to economies of scale. x The forecasted increase in net sales is 20%. The cost of sales percentage for Green Rabbit Transportation Inc. will decrease due to economies of scale. Which of the following could be a direct cause of financing feedback? 1. Issuing additional common stock II. Purchasing additional buildings with internally generated funds III. An unexpected increase in sales IV. Borrowing from the bank I and IV O IV O III and IV O I and II O II and IV O II O III 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: O O O Increase the length of the operating cycle Reduce the level of cash on hand Spontaneously increase liabilities associated with the cost of goods sold Increase charges against net income, reducing the amount of available internally generated funds