A Firm That Makes an Overly Optimistic Sales Forecast Is

question 33

Multiple Choice

A firm that makes an overly optimistic sales forecast is likely to have a:

• A)high inventory turnover ratio.
• B)high depreciation expense.
• C)low inventory carrying cost.
• D)high return on equity.
• E)low level of plant and equipment.

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Definitions:

Variables

Elements, characteristics, or features that can assume different values in a study or experiment, influencing the outcomes being measured.

Multiple Regression Analysis

A statistical process that involves using a range of explanatory variables to predict the behavior of a dependent variable.

Normally Distributed

The distribution is noted for its symmetry about the mean, with a higher concentration of data points near the mean and fewer occurrences as the distance from the mean increases.

Explanatory Variables

Variables in a statistical model that are used to explain variation in the response variable; also known as independent variables.