Which of the following is true about succession planning?
A. It ensures that middle management systematically reviews leadership talent in the company.
B. It provides a set of developmental experiences that managers must complete to be considered for top management positions.
C. All companies have a succession plan ready when they need one.
D. It identifies a specific replacement for each managerial position within the company.
E. It focuses on low-to-medium potential employees.
Answer: B. It provides a set of developmental experiences that managers must complete to be considered for top management positions.
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Prepare a pro forma balance sheet for Amalgamated for next year using the percent-of-sales method and the information provided above
Amalgamated Enterprises is planning to purchase some new equipment. With this new equipment, the company expects sales to increase from $8,000,000 to $10,000,000. A portion of the financing for the purchase of the equipment will come from a $1,000,000 new common stock issue. The company knows that current assets, fixed assets, accounts payable, and accrued expenses increase in direct proportion with sales. The company's net profit margin on sales is 8%, and the company plans to pay 40% of its after-tax earnings in dividends. A copy of the company's current balance sheet is given below: Amalgamated Enterprises Balance Sheet Current assets $3,000,000 Fixed assets 12,000,000 Total assets $15,000,000 Accounts payable $4,000,000 Accrued expenses 1,000,000 Long-term debt 3,000,000 Common stock 2,000,000 Retained earnings 5,000,000 Total liabilities and net worth $15,000,000