QUESTIONS 45 THROUGH 68 RELATE TO FINANCIAL STATEMENT ANALYSIS

3. The company experienced gains on the sale of investments in each of the past three

years.

Which of the following statements about the preparation of the forecast is most accurate?

The analyst would:

A. use the most recent tax rate because that is the best predictor of future tax rates.

B. exclude the gains on the sale from investments because the company is a

manufacturing firm.

C. include the discontinued operations because they appear to be an on-going feature for

this company.

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