Prospective Analysis Is the Forecasting of Future Payoffs-Typically Earnings, Cash

question 1

True/False

Prospective analysis is the forecasting of future payoffs-typically earnings, cash flows, or both.

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Definitions:

Variable Costing

An accounting method that only allocates variable costs to product costs, excluding fixed factory overhead.

Direct Costing

A pricing strategy that only accounts for direct costs in the production of goods, excluding fixed overhead expenses.

Indirect Costing

A method of accounting that allocates indirect costs to products or services, often used in costing overheads.

EBITDA

Term for earnings before interest, taxes, depreciation, and amortization; operating income expressed by adding back depreciation and amortization expense.