Which Value Does a Naïve Forecast Use to Forecast the Next

question 9

Multiple Choice

Which value does a naïve forecast use to forecast the next period?

• A)An average of the last 3 periods
• B)An average of the last 7 periods
• C)A weighted average of the last 3 periods
• D)The previous forecasted value
• E)The current actual value

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Definitions:

Vacation Pay Payable

A liability account representing the amount of vacation pay owed to employees that has not yet been paid.

Current Liability

A financial obligation that a company is required to pay within a year, such as accounts payable, short-term loans, and accrued expenses.

Defined Contribution Plan

A retirement plan in which the employer, employee, or both make contributions on a regular basis, but the future benefit is not predetermined.

Pension Plan

A type of retirement plan that requires an employer to make contributions to a pool of funds set aside for an employee's future benefit.