1. Which of the following accurately describes financing feedbacks?

a. ?The projection of sales, income, and assets, as well as the determination of the resources needed to achieve these projections.

b. ?A forecast of a firm's unit and dollar sales generally based on recent sales trends plus forecasts of the economic prospects for the nation, region, industry, and so forth.

c. ?A method of forecasting financial requirements based on forecasted financial statements.

d. ?Funds that a firm must raise externally through new borrowing or by selling new stock.

e. ?The effects on the income statement and balance sheet of actions taken to finance forecasted increases in assets.

2. Which of the following is the probable outcome of an over-optimistic sales forecast?

a. Low costs for storage

b. High rates of return on equity

c. High inventory turnover ratios

d. High costs for depreciation

e. Low levels of plant and equipment