The Forecasts in the Prior Question Used Several Assumptions

question 13

Multiple Choice

The forecasts in the prior question used several assumptions.Repeat the forecasts where (scenario A ) costs increase with inflation,but all other assumptions hold (costs are $90.0,$91.8,and $97.1 per unit in each of the next three years,respectively) ;and (scenario B ) sales units remain constant,but all the other assumptions hold (including constant costs) .What is the ROIC under each assumption? Which assumption is responsible for a significant increase in ROIC?

• A)In scenario A,ROIC is 15.0 percent,15.6 percent,and 16.8 percent for the next three years,respectively.ROIC significantly increases under this assumption versus the constant costs assumption.
• B)In scenario B,ROIC is 15.0 percent,16.3 percent,and 21.5 percent for the next three years,respectively.ROIC significantly increases under this assumption versus the increasing costs assumption.
• C)In scenario B,ROIC is 15.0 percent,15.6 percent,and 16.8 percent for the next three years,respectively.ROIC significantly increases under this this assumption versus the increasing costs assumption.
• D)In scenario A,ROIC is 15.0 percent,16.3 percent,and 21.5 percent for the next three years,respectively.ROIC significantly increases under this this assumption versus the increasing costs assumption.

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Definitions:

Individual Psychology

A psychological framework which emphasizes understanding the uniqueness of each individual and how they strive for success and cope with feelings of inferiority.

Indivisible Whole

A concept referring to something that cannot be divided into smaller parts without losing its essential nature or function.

Treats Each Person

An approach or policy of individualized consideration and interaction, acknowledging the unique nature of each person.

Mental Health

A state of well-being in which an individual realizes his or her own abilities, can cope with the normal stresses of life, can work productively, and is able to make contributions to their community.