16) A firm's final sales forecast is usually a function of ________.

A) its net income B) its accounts receivable

C) the salesperson's estimates of demand D) internal and external factors in combination

17) ________ are projected financial statements.

A) Pro forma statements B) Cash budgets

C) Cash flow statements D) Statements of retained earnings

18) The percent-of-sales method to prepare a pro forma income statement assumes a firm has no fixed costs. Therefore, the use of the past cost and expense ratios generally tends to ________ profits when sales are increasing.

A) understate B) overstate C) have no effect on D) accurately predict

19) Calculate net operating profit after taxes (NOPAT) if a firm has sales of $1,000,000, operating profit (EBIT) of $100,000, interest expense of $50,000, and a tax rate of 30%.

A) $35,000 B) $70,000 C) $700,000 D) $45,000