The Primary Purpose of the Mean Absolute Deviation (MAD) in Forecasting

question 135

Multiple Choice

The primary purpose of the mean absolute deviation (MAD) in forecasting is to:

• A) estimate the trend line.
• B) eliminate forecast errors.
• C) measure forecast accuracy.
• D) seasonally adjust the forecast.
• E) remove random variations.

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Definitions:

Internal Rate of Return

A metric used in capital budgeting to estimate the profitability of potential investments, calculated as the rate of return that makes the net present value of all cash flows from a particular project equal to zero.

Automated Molding

The use of machines and technology to create molds for producing parts or products with minimal human intervention.

Cash Savings

The reduction in cash expenditures due to cost-saving measures, representing an increase in liquidity.

Straight-Line Depreciation

Straight-line depreciation is a technique that spreads the expense of a physical asset evenly across its useful lifespan in uniform yearly instalments.