The percent-of-sales method to prepare a pro forma income ...

[Kikoku]

The percent-of-sales method to prepare a pro forma income statement assumes a firm has no fixed costs. Therefore, the use of the past cost and expense ratios generally tends to ________ profits when sales are increasing.
 
  A) accurately predict
  B) overstate
  C) understate
  D) have no effect on

Question 2

Your friend John started college at the age of 18 with 63,450 already saved, because 18 years ago when he was born his parents placed money into a special college savings account earning 7.25 per year.
 
  How much money did John's parents place into his college account?
  A) 18,000
  B) 3,525
  C) 17,262
  D) 5,824

[joechoochoy]

Answer to Question 1

C

Answer to Question 2

Answer: A
Explanation: A) PV = = = 18,000.32
MODE = END
INPUT 18 7.25 ? 0 63,450
KEY N I/Y PV PMT FV
CPT 18,000.32

[Kikoku]

Gracias!

[Chelseyj.hasty]

Thanks for the timely response, appreciate it