One Technique of Forecasting Is Called the Moving Average

question 39

Multiple Choice

One technique of forecasting is called the moving average.In this method,rather than using last year's sales as the forecast ___________.

• A)A simple average for the last two or four years is used
• B)A smoothing technique is used to determine the forecast
• C)A decomposition of the industry is used to average the sales
• D)An average is calculated using the midpoint of the sales trend and then is computed by multiplying it by a beta coefficient to get the next year's forecast
• E)None of these

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Definitions:

Free Cash Flow

A financial metric that measures the amount of cash generated by a company after accounting for capital expenditures.

Net Income

The total profit of a company after all expenses, taxes, and costs have been deducted from total revenue, indicating financial performance.

Cost of Goods Sold

Expenses directly linked to the creation of a company's sold goods, which include the costs of materials and labor.

Cash Paid

The total amount of cash disbursed by a company during a given period for various purposes, including operating expenses, asset purchases, or debt repayment.