Which of the following should be included when compiling pro forma statements for a proposed investment? I. forecasted sales
II) start-up costs
III) aftertax salvage value of any assets sold
IV) anticipated changes in net working capital

Question

Quizplus · Accepted Answer

When compiling pro forma statements for a proposed investment, all of the given options should be included. Forecasted sales are important to estimate the future revenue of the investment. Start-up costs are necessary to determine the initial investment required. Aftertax salvage value of any assets sold is relevant to estimate the cash inflows at the end of the investment. Anticipated changes in net working capital can be useful to decide the cash outflow requirements during the investment period. Therefore, all four options should be considered when compiling pro forma statements.

Which of the Following Should Be Included When Compiling Pro