The Zocor Company Is Interested in Forecasting Period 13 Sales

question 59

Multiple Choice

The Zocor Company is interested in forecasting period 13 sales for a product. It has 12 months of historical data. The following shows the data and the forecasted valued for periods 1-12 using a single exponential smoothing model with a smoothing constant value equal to 0.20 What is the value of the MAD for periods 2-12?

• A) About 19.6
• B) Nearly 6
• C) Approximately 15.4
• D) Can't be determined without more information

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Definitions:

Owner's Equity

The value that accrues to the owners of a company after settling all its debts, equivalent to the assets minus the liabilities.

Residual Equity

Residual Equity represents the amount of equity that remains for the common shareholders after all liabilities and preferential stock claims have been settled.

Assets

Assets are possessions of an individual or a business that hold value and can yield benefits in the future.

Liabilities

Financial obligations or debts that a company owes to outside parties, which must be paid back in the future.