A pro forma statement indicates that both sales and fixed assets are projected to increase by 7 percent over their current levels.Given this,you can safely assume that the firm:
A)is projected to grow at the internal rate of growth.
B)is projected to grow at the sustainable rate of growth.
C)currently has excess capacity.
D)is currently operating at full capacity.
E)retains all of its net income.

Question

Quizplus · Accepted Answer

A pro forma statement showing an increase in both sales and fixed assets suggests that the firm is expanding its operations to support higher sales, indicating it was previously operating at full capacity.

A Pro Forma Statement Indicates That Both Sales and Fixed