Use the assumptions described in the table when modeling items that are not computed as totals or
Question:
Use the assumptions described in the table when modeling items that are not computed as totals or subtotals.
Variable | Modeling assumptions |
Revenue | Annual revenue growth in each forecast year is equal to 4.56 percent |
Depreciation | Depreciation to sales in each forecast year is equal to the average annual ratio from the last 2 years of the historical period |
Amortization | Amortization to revenue in each forecast year is 0.53 percentage points less than the average ratio from the historical period |
Shareholders’ equity | Shareholders’ equity in each forecast year is $98,765 higher than shareholders’ equity in the previous year |
Cash flows from operating activities | Cash flows from operating activities to revenue in each forecast year is equal to the ratio from the previous year |
Cash flows from investing activities | Cash flows from investing activities is expected to be $9,043 lower in each forecast year than in the previous year |
Cash flows from financing activities | The annual growth rate for cash flows from financing activities in each forecast year is equal to the average annual growth rate for cash flows from financing activities from the historical period |