A Weakness of the Percent-Of-Sales Method to Preparing a Pro

Multiple Choice

A weakness of the percent-of-sales method to preparing a pro forma income statement is

A) the assumption that the firm faces linear total revenue and total operating cost functions.
B) ease of calculation and preparation.
C) the assumption that the firm's past financial condition is an accurate predictor of its future.
D) the assumption that the values of certain accounts can be forced to take on desired levels.