Forecasting capital expenditures and external financing

1. What is the purpose of long-term forecasting?

2. What are the advantages and disadvantages of the percent of sales method?

3. What is gained by forecasting capital expenditures and external financing specifically?

4. How can the financial manager use the long-term forecast to decide on adopting a new business plan?

5. What can the sustainable growth rate tell a financial manager and what can it not tell?

Solution: