8. Projected financial statements and basic analysis You are the most creative analyst for Avatar Animators Inc., and your admirers want to see you work your analytical magic once more. 2016 Actual Results 2017 Initial Forecast Net sales $16,000 (12,800) $3,200 $19,200 (15,360) Cost of goods sold Gross profit $3,840 (960) Fixed operating costs except depreciation Depreciation (800) (320) Earnings before interest and taxes $2,080 (384) $2,496 (320) Interest (320) Earnings before taxes $1,760 $2,176 Taxes (704) (870.4) Net income $1,056 1,305.6 (570.24) Common dividends (570.24) Addition to retained earnings $485.76 $735.36 Earnings per share $52.8 $65.28 Dividends per share $28.512 $28.512 Number of common shares (millions) 20.0 20.0 Which of the following are assumptions made by the initial income statement forecast? Check all that apply. Additional external financing will be required by Avatar Animators Inc. The forecasted increase in net sales is 20%. The facility is not currently operating at full capacity. No additional external financing will be required. The assigned depreciation method has changed. The facility is currently operating at full capacity. If Avatar Animators 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? alternative fiduciary necessities additional financing needed tes payable added fair needs additional funds needed If Avatar Animators 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 II and III I and II O I, II, and III Just II Just III I only