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.

Which of the following are assumptions made by the initial income statement forecast? Check all that apply.

No additional external financing will be required.

The facility is not currently operating at full capacity.

The facility is currently operating at full capacity.

Additional external financing will be required by Avatar Animators Inc.

The assigned depreciation method has changed.

The forecasted increase in net sales is $20\%.$

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

I and II

Just II

II and III

Just III

I, II$,$ and III

I only