Which of the Following Is NOT One of the Steps

question 19

Multiple Choice

Which of the following is NOT one of the steps in the forecast of individual line items related to the income statement?

• A)Determine the economic relationships that drive the model.
• B)Model the business cycle.
• C)Estimate the forecast ratios.
• D)Forecast the drivers and multiply times the respective ratios.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or output over the short term, such as rent or salaries.

Variable Cost

Expenses that change in proportion to the amount of production or output levels.

Sensitivity Analysis

A technique used to determine how different values of an independent variable affect a particular dependent variable under a given set of assumptions.

Fixed Costs

Expenses that do not change with the amount of goods or services produced, such as rent, salaries, or insurance.