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You are the most creative analyst for Green Rabbit Transportation Inc., and your admirers want to see you work your analytical magic once more. 2017
You are the most creative analyst for Green Rabbit Transportation Inc., and your admirers want to see you work your analytical magic once more. 2017 Initial Forecast Gross profit Earnings per share Fixed operating costs except depreciation Addition to retained earnings Earnings before taxes Dividends per share Taxes Depreciation Interest Common dividends Number of common shares (millions) Cost of goods sold Net income Net sales Earnings before interest and taxes 2016 Actual Results $3,200 $53 (800) $486 $1,760 $29 (704) (320) (320) (570) 20.0 (12,800) $1,056 $16,000 $2,080 $3,840 $65 (960) $736 $2,176 $29 (870) (384) (320) (570) 20.0 (15,360) 1,306 $19,200 $2,496 Which of the following are assumptions made by the initial income statement forecast? Check all that apply. The forecasted increase in net sales is 20%. The assigned depreciation method has changed. The facility is currently operating at full capacity. Additional external financing will be required by Green Rabbit Transportation Inc. No additional external financing will be required. The facility is not currently operating at full capacity. Of Green Rabbit Transportation Inc. had neither a sufficient amount of excess capacity to handle forecasted increases in operations nor the level of retained earnings required to increase asset levels up to the necessary level for production, this difference would be referred to as and could be acquired in wwhich of the following forms? 1. Issuing additional common stock II. Borrowing from a bank using notes payable III. Issuing long-term bonds Just III I and II Just II I only I, II, and III II and III O O
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