Assume you just received your MBA and now works as an assistant to the CFO of a large corporation. You have been asked by the CFO to prepare a financial forecast for the coming year, using an Excel model, and then to present your forecast to the executive officers. Describe how you will deal with one or more of the following issues:

a. Would you want to set up the model with a number of scenarios ? Explain why.

b. What are "financial feedbacks" and what are the pros and cons of incorporating such feedback into your model.

c. Would you assume that all necessary outside funds are obtained from a single sources, such as a bank loan? Or would you assume a mix of funds raised to keep a target level capital structure? State the pros and cons.

d. Would you want to incorporate into the model the capability to examine the results of changing dividend policy and capital structure policy? What other operating policy change may you ant to consider?

e. What does the acronym GIGO stand for and how important is this for someone who is developing a financial model? How might post-audits and incentive compensation plans help reduce GIGO?