Hansboro Corporation's budget planning meeting is like a zoo. Nell Zgleason, the credit manager, is naturally conservative and Rachel Lawson, the marketing manager, is the opposite. They have argued back and forth about the effect of various factors that influence the sales growth rate, such as credit policies and market potential. Based on the following current year data provided by Shirely Chandler, the controller, Nell Expects Hansboros revenues to grow 5 percent each quarter above last year's level; Rachel insists the growth rate will be 8 percent per quarter.

Historically, the cost of goods cold is projected at 50 percent of sales revenue. Selling and administrative expenses are expected to be 12.5 percent of sales revenue.

1. Prepare a pro forma income statement for the coming year using the credit managers growth estimate

2. Prepare a pro forma income statement for the coming year using the marketing managers growth estimate

3. Explain why two executives in the same company could have different estimates of future growth