When doing pro forma projections, why do forecasters use sensitivity analysis? A. To calculate multiple scenarios that lead to multiple strategies. B. Because historical data gives a good indication of future results. C. To provide a range of possible outcomes and see if any lead to ruin. D. To assess the impact of differing assumptions on the financial pro forma and resultant health of the firm. The sustainable growth rate is A. a measure of the maximum amount of growth a company can support, given its current management approach. B. a measure of the maximum amount of growth a company can support given its product offering and profitability. C. a measure of the maximum amount of growth a company can support, given the current profit margin, asset turnover, and assets-to-equity ratios. D. a measure of maximum amount of growth a company can support, given the amount of equity and bank financing available to the company. The owner of fast-growing Jackson Lumber has called you in to provide financial consulting services. The owner complains that he never seems to have enough cash on hand to fund his business. During your research, you find that the company is exceeding its sustainable growth rate. Which of the following actions would you recommend to improve the cash position of the company? A. Take on more debt. B. Reduce the sale of products that are not producing sufficient profit margins. C. Consider price increases to existing products. D. Increase the dividend that is paid to shareholders. E. A, B, and C above. You have been asked by a local grocery company to review their financial performance. You calculate that they are growing well below their sustainable growth rate and are still very profitable. Which of the following would you recommend to the company to reduce their sustainable growth rate? A. Take on more debt. B. Reduce the sale of products that are not producing sufficient profit margins. C. Consider price increases on existing products. D. Increase the dividend that is paid to shareholders. E. A, B, and C above