2. Projected financial statements and basic analysis You are the most creative analyst for Purple Chicken Builders, and your admirers want to see you work your analytical magic once more. This Year's Actual Results Net sales Cost of goods sold Gross profit Next Year's Initial Forecast $21,240,000 16,992,000 $4,248,000 900,000 424,800 $2,761,200 360,000 $18,000,000 14,400,000 $3,600,000 900,000 360,000 $2,340,000 360,000 $1,980,000 792,000 Fixed operating costs except depreciation Depreciation Earnings before interest and taxes Interest Earnings before taxes Taxes $2,401,200 960,480 $1,440,720 Net Income Common dividends Addition to retained earnings Earnings per share Dividends per share Number of common shares (millions) $1,188,000 641,520 $546,480 $0.24 641,520 $799,200 50.29 $0.13 5.00 $0.13 5.00 Which of the following are assumptions made by the initial income statement forecast? Check all that apply. The assigned depreciation method has changed. No additional external financing will be required. The facility is not currently operating at full capacity Additional external financing will be required by Purple Chicken Builders. The facility is currently operating at full capacity Which of the following could be a direct cause of financing feedback? Check all that apply. Borrowing from the bank Issuing additional common stock Repaying notes payable An unexpected increase in sales What is one of the potential consequences of financing feedback that might cause the actual financing needs to be higher than initially thought? Financing feedback might: Reduce the level of cash on hand Spontaneously increase liabilities associated with the cost of goods sold Increase charges against net income, reducing the amount of available internally generated funds Increase the length of the operating cycle