A Clothes Retailer Has Estimated a Linear Trend Equation Including

question 9

Multiple Choice

A clothes retailer has estimated a linear trend equation including trend, seasonal and cyclical components to forecast its sales for the next four quarters. Which of the following factors would generate actual sales figures that are likely to differ markedly from the forecast?

• A) A drop in sales due to emergency roadwork blocking access to the store.
• B) A drop in sales due to the ongoing economic recession.
• C) An increase in sales due to the increasing popularity of their brand.
• D) An increase in sales before a major religious festival.

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Definitions:

Subtotals

Intermediate totals calculated by adding up a group of numbers, often used to make data analysis easier within financial documents or spreadsheets.

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in time, representing the decrease in its value due to wear and tear.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing insights into its financial position.

Rent Expense

The cost incurred from leasing a property or equipment for business operations, recognized as an expense on the income statement.