An important reason for making financial projections is forecasting whether the firm will need money from outside sources in the coming year. If the planning assumptions result in a need for extra money, it shows up in the plan as:

A) a negative net income.
B) a negative equity account.
C) an increase in debt.
D) a very substantial drop in revenue.

Planning Assumptions

The set of hypotheses upon which a plan or strategy is built, regarding future market conditions, costs, or other factors.

Negative Net Income

A financial situation where a company's total expenses exceed its revenues, leading to a loss.

Extra Money

Extra money refers to funds that are available beyond what is needed for regular expenses, savings, or immediate commitments.