Question

Elvira is considering purchasing a new truck for her distribution company. To better evaluate such a financial risk, she makes projections about what her company's financial condition will be like in the future if a new truck is purchased. This is referred to as a/an ______.

Answer 1

Pro forma financial statement.

Step-by-step explanation:

Pro forma financial statement is the way an organization bases possible funding on projections and assumptions, usually opposed to actual financial statements from an earlier period.

The company may project effects of a new acquisition or financing on three separate effects, so that it can analyze through a projection of income statement, cash flows and balance sheet the three distinct effects of such action, in order to analyze the benefits and risks linked.