FIN 571 TUTOR Career Path Begins/fin571tutor.com FIN 571 TUTOR Career Path Begins/fin571tutor.com | Page 36

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Phyllis believes that the firm should use straight-line
depreciation for a capital project because it results in higher net
income during the early years of the project’s life. Joanna
believes that the firm should use the modified accelerated cost
recovery system depreciation because it reduces the tax liability
during the early years of the project’s life. Assuming you have a
choice between depreciation methods, whose advice should you
follow? Why?
---------------------------------------------------------------------------FIN 571 Week 4 Individual Assignment Analyzing Pro
Forma Statements

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Decide upon an initiative you want to implement that would
increase sales over the next five years, (for example, market
another product, corporate expansion, and so on).Using the
sample financial statements, create pro forma statements of five
year projections that are clear, concise, and easy to read. Be sure
to double check the calculations in your pro forma statements.
Make assumptions that support each line item increase or
decrease for your forecasted statements.