Fundamentals of Financial Management, Third Edition

OBJECTIVE-TYPE QUESTIONS

1. mark true or false.
   1. Forecasts of single variables are combined to arrive at a complete forecast.
   2. The projection of sales depends on past trends along with some casual events affecting the trend.
   3. Regression analysis is used to make forecasts.
   4. Ratios are normally not used to make forecasts.
   5. The forecast of variables has nothing to do with projected sales.
   6. Cash-flow approach and the balance-sheet approach are the two methods of making a complete forecast.
   7. Balance-sheet approach is a substitute for a cash-flow forecast.
2. Choose the most suitable answer.
   1. Proforma balance sheet can be developed on the basis of:
      1. cash-flow forecast only
      2. proforma income statement
      3. neither of the above
   2. A cash-flow forecast is developed on ...