[TRUE/FALSE]

T F Longterm debt spontaneously changes with the level of sales.

T F Accounts payable are illustrative of liabilities that spontaneously vary with the level of sales.

T F The percent of sales method of forecasting assumes that fixed assets vary proportionately with sales.

T F The more a firm earns and distributes, the less will be the need for external finance.

T F If percent of sales is used to forecast, increased sales implies inventory as a percent of sales increases.

T F If accounts receivable are 20% of sales and the level of sales doubles, the percent of sales says that accounts receivable will be 40% of sales.

T F If forecasting over-predicts the level of an asset, the firm will over-plan its financial needs.

T F If a firm distributes a larger proportion of its earnings, the external need for finance is reduced.

T F If fixed assets increase with an increase in sales, the firm will need fewer sources of finance.

T F Regression analysis assumes that inventory as a percent of sales is constant.

T F Regression analysis may be used to estimate the slope of the line relating sales and accounts receivable.

T F 12. If regression analysis estimates that assets exceed liabilities and equity, the firm will require external sources of finance.