Which of the following is the best definition for pro forma financial statements?

Multiple Choice

• A cost that has already been incurred and cannot be removed and therefore should not be considered in an investment decision.

• Financial statements projecting future years' operations.

• Depreciation method under Canadian tax law allowing for the accelerated write-off of property under various classifications.

• Evaluation of a project based on the project's incremental cash flows.

• The most valuable alternative that is given up if a particular investment is undertaken.