When fiXed Assets on a Pro Forma Statement Are Projected

Multiple Choice

When fixed assets on a pro forma statement are projected to increase at a rate equivalent to the projected rate of sales growth, it can be assumed that the firm is:

A) Projected to grow at the internal rate of growth.
B) Projected to grow at the sustainable rate of growth.
C) Creating excess capacity.
D) Currently operating at full capacity.
E) Retaining all of its projected net income.