Author Question: The percent-of-sales method to prepare a pro forma income statement assumes a firm has no fixed ... (Read 114 times)

Kikoku · **on:** Jul 10, 2018

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 · **Reply #1 on:** Jul 10, 2018

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