I Long-Term Forecasts Are Usually from One Year to More

question 3

Multiple Choice

i. Long-term forecasts are usually from one year to more than 10 years into the future.
ii. A forecast is considered necessary in order to have the raw materials, production facilities, and
Staff available to meet estimated future demands.
iii. Many business and economic time series have a recurring seasonal pattern.

• A) (i), (ii), and (iii) are all correct statements.
• B) (i) and (ii) are correct statements but not (iii).
• C) (i) and (iii) are correct statements but not (ii).
• D) (ii) and (iii) are correct statements but not (i).
• E) (i), (ii), and (iii) are all false statements.

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Definitions:

Discounting

The process of determining the present value of future cash flows by applying a particular interest rate; often used in investment and finance.

Present Value

The value today of a future amount of money or sequence of cash inflows, accounting for a defined rate of return.

Interest Rate

The percentage of a sum of money charged for its use, serving as the cost of borrowing or the reward for saving.

Time Preference

The degree to which individuals prioritize current goods and services over future ones.