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Each candidate (A, B, C) is provided Chrome's financial information in $ million) presented below. Green asks each candidate to forecast the 2013 income statement
Each candidate (A, B, C) is provided Chrome's financial information in $ million) presented below. Green asks each candidate to forecast the 2013 income statement for Chrome and to outline the key assumptions used in their analysis. The job candidates are told to include Horizon's economic outlook for 2013 in their analysis, which assumes nominal GDP growth of 3.6%, based on expectations of real GDP growth of 1.6% and inflation of 2.0%. Year Ended: 2010 2011 2012 50.5 53.9 46.8 18.2 28.6 18.4 18.8 32.1 35.1 19.3 22.5 25.1 Net sales Cost of sales Gross profit Selling, general, and administrative (SG&A) expenses Operating income Interest expense Income before provision for income tax Provision for income taxes Net income 9.3 9.6 10.0 0.5 0.7 0.6 8.8 8.9 9.4 2.8 2.8 3.1 6.0 6.1 6.3 According to the economic forecast, Chrome's income statement in 2010-12, and the candidates' assumptions in Question 5, answer the following: Candidate C's forecast for cost of sales in 2013 is closest to $ * million. in 2013 is closest to $ Candidate A's forecast for selling, general, and administrative million. (1 decimal place) 18.3 18.9 19.3 According to the economic forecast, Chrome's income statement in 2010-12, and the candidates' assumptions in Question 5, answer the following: Candidate C's forecast for cost of sales in 2013 is closest to $ 4 million. Candidate A's forecast for selling, general, and administrative expenses in 2013 is closest to $ million. (1 decimal place)
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