Sheena Is Using Her Last Three Years' Sales to Forecast

question 5

Multiple Choice

Sheena is using her last three years' sales to forecast next year's sales.Sheena is using the _________ method.

• A)direct
• B)indirect
• C)variable
• D)primary

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Definitions:

Retained Earnings

The portion of a company’s profit that is held back and not distributed to shareholders as dividends, to be reinvested in the business.

EBIT

Earnings Before Interest and Taxes - an indicator of a company's profitability that calculates income without tax expenses and interest expenses.

Straight Line

A method of allocating the cost of a tangible asset over its useful life in equal installments.

Net Income

The net income a company achieves once all costs and taxes are subtracted from its total revenues.