In developing the pro forma income statement, we follow four important steps: 1) Compute other expenses. 2) Determine a production schedule. 3) Establish a sales projection. 4) Determine profit by completing the pro forma income statement. What is the correct order for these four steps?

MG Lighting had sales of 500 units at $100 per unit last year. The marketing manager projects a 15 percent decrease in unit volume this year because a 10 percent price increase is needed to pass rising costs through to customers. Returned merchandise will represent 3.2 percent of total sales. What is MG Lighting net dollar sales projection for this year?

In developing data for accounts receivable for the pro forma balance sheet, the analyst is most likely to turn to the

In the construction of the cash payments schedule, the major cash payment for a manufacturing company is generally

Carissa invests $20,000 in a limited partnership today. At the end of each years 1 through 5, she will receive the after-tax cash flows shown below. The partnership will be liquidated at the end of the fifth year. Carissa is in the 35% federal income bracket. Years Cash Flows 0 – $20,000 CF0 1 $0 CF1 2 $4,000 CF2 3 $6,000 CF3 4 $8,000 CF4 5 $10,000 CF5 The after-tax IRR on this investment is:

Julia purchases a new piece of equipment for her business. The equipment was purchased for $65,000 and is expected to generate the following cash flows at the end of each year for the next seven years: $14,000 (year 1), $19,000 (year 2), $21,000 (year 3), $21,000 (year 4), $16,000 (year 5), $11,000 (year 6), and $9,000 (year 7). Assume the equipment can be sold for $10,000 at the end of 7 years and Julia required rate of return is 9%. What is the net present value of this investment?

Your client invested $10,000 in an interest-bearing promissory note earning an 11% annual rate of interest, compounded monthly. How much will the note be worth at the end of 7 years, assuming that all interest is reinvested at the 11% rate?

Jason received a check for $50,000 today. This was from an investment made 10 years ago. The investment earned 8% compounded quarterly. How much was his original investment?

Diego has been dollar cost averaging in a mutual fund by investing $2,000 at the beginning of every quarter for the past 7 years. He earns an average annual compound return of 11% on this investment, compounded quarterly. How much is the fund worth today?

Mindy is trying to decide whether she should make her IRA contribution at the beginning of the year or at the end of the year. She wants to save $5,000 per year for 25 years in her IRA that can earn 7% per year. What would be the difference in her account value if she made the payments at the beginning of each year rather than at the end?