As with All Forecasting Methods,statistical Methods Have Important Limitations

question 32

True/False

As with all forecasting methods,statistical methods have important limitations.Most important of these is that statistical methods generally assume that the future will look very much like the past.This is an example of a limitation of qualitative forecasting.

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Definitions:

Double-Declining Balance Method

A method of accelerated depreciation calculating an asset's loss of value at double the rate of the straight-line depreciation method.

Depreciation Expense

The allocated amount of an asset's cost that is written off as an expense over its useful life, reflecting the consumption of the asset.

Residual Value

The estimated amount that an asset will be worth at the end of its useful life.

Second-Hand Machine

Pertains to machinery that has been previously owned and used, often sold at a lower price compared to new equipment.