The Projected Statement of Financial Position Forecasting Method Produces Accurate

question 6

Multiple Choice

The projected statement of financial position forecasting method produces accurate results unless which of the following condition(s) is (are) present?

• A) Fixes assets are "lumpy."
• B) Strong economies of scale are present.
• C) Excess capacity exists because of a temporary recession.
• D) Answers a, b, and c all make the projected financial position method inaccurate.
• E) Answers a and c make the projected statement of financial position method inaccurate, but as the text explains, the assumption of increasing economies of scale is built into the projected balance sheet method.

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