Quarterly Sales Data (In $10,000) for a Small Company Specializing

question 11

Multiple Choice

Quarterly sales data (in $10,000) for a small company specializing in green cleaning products are shown in the time series graph below.The forecasting method that would likely fit these data the best is ________________________

• A)single exponential smoothing
• B)linear trend
• C)seasonal regression model
• D)moving average
• E)naive

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Definitions:

Risk Class

Categories of assets or investments grouped together based on the level of risk and return characteristics they possess.

Cost of Equity

The theoretical disbursement a firm makes to its equity stakeholders as remuneration for the risk they bear by putting their capital into the business.

Dividend Growth Model

A valuation model that estimates the price of a company's stock based on the expected dividends and their growth rate.

After-tax Cost

The cost of an investment or expense after the effects of income tax have been taken into account.