Assets, Accounts Payable and Costs Are Proportional to Sales

Multiple Choice

Assets, accounts payable and costs are proportional to sales. Debt and equity are not. Sales of Wintergreen, Inc. are expected to increase by 7% next year. Wintergreen is currently
Operating at maximum capacity. Wintergreen does not pay a dividend. Given this projection, which
One of the following statements is correct concerning next year's pro forma statement for
Wintergreen Inc. if the percentage of sales approach is used?

A) Costs are projected to be $11,311.
B) Net income is projected to be $1,986.
C) The projected retained earnings is $11,406.
D) The long-term debt is projected to be $7,062.
E) The EFN is projected to be $52.