When doing pro forma projections, why do forecasters use sensitivity analysis? A. To calculate multiple scenarios that lead to multiple strategies. B. Because historical data gives a good indication of future results. C. To provide a range of possible outcomes and see if any lead to ruin. D. To assess the impact of differing assumptions on the financial pro forma and resultant health of the firm. The owner of fast-growing Jackson Lumber has called you in to provide financial consulting services. The owner complains that he never seems to have enough cash on hand to fund his business. During your research, you find that the company is exceeding its sustainable growth rate. Which of the following actions would you recommend to improve the cash position of the company? O A. Take on more debt. B. Reduce the sale of products that are not producing sufficient profit margins. O C. Consider price increases to existing products. OD. Increase the dividend that is paid to shareholders. O E. A, B, and C above. You have been asked by a local grocery company to review their financial performance. You calculate that they are growing well below their sustainable growth rate and are still very profitable. Which of the following would you recommend to the company to reduce their sustainable growth rate? O A. Take on more debt. OB. Reduce the sale of products that are not producing sufficient profit margins. O C. Consider price increases on existing products. D. Increase the dividend that is paid to shareholders. OE. A, B, and C above. Why are financial pro formas so important? A. They are the most widely used vehicles for predicting the future. B. Pro Formas allow companies, their management, their employees, and their shareholders to view future performance in a logical and consistent manner. C. Pro formas allow a company to always accurately predict what will happen in the long term. D. Pro Formas are the only basis for evaluating the value of a company