One of the Assumptions Made in Forecasting Financial Requirements Based

question 55

Multiple Choice

One of the assumptions made in forecasting financial requirements based on the forecasted income statement is that:

• A) costs in the next year will remain the same as the previous year.
• B) costs will increase at the same rate as sales.
• C) costs in the next year will be an average of the costs of the three previous years.
• D) costs will move in the opposite direction of sales.
• E) costs will be according to the industry standards.

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Definitions:

Unjust Enrichment

A windfall that one party to a contract stands to make at the expense of the other.

Collateral Contract

A separate contractual obligation that can stand alone, independent of the written contract.

Inferred Trust

A trust implied by law to work out justice between the parties, based on certain circumstances or conduct, as opposed to being established by explicit words.

Vicarious Performance

Performance by another designated person of the obligations under a contract rather than the actual contracting party.