The finance staff at Millcreek Company have constructed a forecast of the company’s net income.The chief executive officer (CEO) of Millcreek wonders why the forecast of next year’s interestexpense is the same as this year’s interest expense, whereas next year’s sales are expected toincrease by 20% over this year’s sales. What is the most likely explanation?a) Millcreek is expected to be more aggressive at minimizing its income tax expense next yearb) Millcreek expects its operating expenses to increase by 20% next year, the same as the expectedincrease in salesc) Millcreek is not expected to obtain any new loans next year, not repay any old loansd) Millcreek expects its operating expenses to increase by more than 20% increase in salesexpected next year
The finance staff at Millcreek Company have constructed a
The chief executive officer (CEO) of Millcreek wonders why the forecast of next year’s interest
expense is the same as this year’s interest expense, whereas next year’s sales are expected to
increase by 20% over this year’s sales. What is the most likely explanation?
a) Millcreek is expected to be more aggressive at minimizing its income tax expense next year
b) Millcreek expects its operating expenses to increase by 20% next year, the same as the expected
increase in sales
c) Millcreek is not expected to obtain any new loans next year, not repay any old loans
d) Millcreek expects its operating expenses to increase by more than 20% increase in sales
expected next year
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