The Percent-Of-Sales Method of Financial Forecasting

question 93

Multiple Choice

The percent-of-sales method of financial forecasting

• A) is more detailed than a cash budget approach.
• B) requires more time than a cash budget approach.
• C) assumes that balance sheet accounts maintain a constant relationship to sales.
• D) provides a month-to-month breakdown of data.

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Definitions:

Linear Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded, characterized by a straight line.

Unit Elastic

A situation where a change in price leads to an equivalent proportional change in quantity demanded or supplied.

University Chamber Music Society

An organization within a university that promotes the performance and appreciation of chamber music among students and the community.

Inelastic

Refers to a situation where the demand or supply for a good or service is not significantly altered by changes in price.