When Fixed Assets on a Pro Forma Statement Are Projected

question 18

Multiple Choice

When fixed assets on a pro forma statement are projected to increase at a rate equivalent to the projected rate of sales growth, it can be assumed that the firm is:

• A) Projected to grow at the internal rate of growth.
• B) Projected to grow at the sustainable rate of growth.
• C) Creating excess capacity.
• D) Currently operating at full capacity.
• E) Retaining all of its projected net income.

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