Pro forma statements for a proposed project should:
I.be compiled on a stand-alone basis.
II.include all the incremental cash flows related to the project.
III.generally exclude interest expense.
IV.include all project-related fixed asset acquisitions and disposals.
A)I and II only
B)II and III only
C)I, II, and IV only
D)II, III, and IV only
E)I, II, III, and IV

Question

Quizplus · Accepted Answer

Pro forma statements for a proposed project should be compiled on a stand-alone basis to isolate the project's financial impact, include all incremental cash flows (both inflows and outflows), generally exclude interest expense because cash flows are analyzed on a pre-financing basis, and include all project-related fixed asset acquisitions and disposals to accurately reflect the investment and any subsequent changes in assets.

Pro Forma Statements for a Proposed Project Should