The Phrase, "Forecasts Do Not Develop in a Vacuum," Is

question 78

Multiple Choice

The phrase, "Forecasts do not develop in a vacuum," is a reminder that:

• A)Forecasters are known not to work well alone
• B)Planners will offer ten plans when asked for one
• C)Competitors also make plans and react to ours
• D)Forecasts should be developed at headquarters

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Definitions:

Investing Activities

Financial operations that involve the purchase and sale of long-term assets and other investments not considered cash equivalents.

Financing Activities

Refers to the transactions and events that affect long-term liabilities and equity of a company, including issuing debt, selling shares, and paying dividends.

Direct Approach

A method of income statement preparation where expenses are listed directly against revenue items to show the net income.

Indirect Approach

A method often used in preparing cash flow statements where net income is adjusted for non-cash transactions and changes in working capital.