11. Projected financial statements and basic analysis You are the most creative analyst for Green Rabbit Transportation Inc., and your admirers want to see you work your analytical magic once more. 2016 Actual Results $1,980 $18,000 $2,340 $3,600 $546 (900) 2017 Initial Forecast $2,682 $23,400 $3,042 $4,680 $967 (1,170) Earnings before taxes Net sales Earnings before interest and taxes Gross profit Addition to retained earnings Fixed operating costs except depreciation Number of common shares (millions) Interest Taxes Net income Common dividends Cost of goods sold Dividends per share Earnings per share Depreciation 20.0 (360) (792) $1,188 (642) (14,400) $32 $59.4 (360) 20.0 (360) (1,073) 1,609 (642) (18,720) $32 $80 (468) Which of the following are assumptions made by the initial income statement forecast? Check all that apply. The cost of sales percentage for Green Rabbit Transportation Inc. will decrease due to economies of scale. Spontaneously generated funds will sufficiently cover any financing needs. Green Rabbit Transportation Inc. will be issuing additional shares of common stock in the coming year. Green Rabbit Transportation Inc. will be issuing additional debt in the coming year. No excess capacity currently exists. The forecasted increase in net sales is 30%. If 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 which of the following forms? I. Issuing additional common stock II. Borrowing from a bank using notes payable III. Issuing long-term bonds