What Would Be the Appropriate Way to Forecast Sales for a Firm

question 64

Multiple Choice

What would be the appropriate way to forecast sales for a firm that has stable year-to-year sales, but seasonally fluctuating month-to-month sales?

• A) Forecasts would need to be adjusted for a trend, but would not need a regression to adjust for seasonality.
• B) Forecasts would need to be adjusted for seasonality, but would not need a regression to adjust for a trend.
• C) Ignore both the trend and the seasonality.
• D) None of the options.

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Definitions:

Dividend Clienteles

Groups of investors who prefer stocks of companies with a specific dividend policy that matches their income needs and tax situations.

Cyclical Dividend Policy

A dividend policy where the dividend payout is linked to the company's earnings or economic cycles.

Special Dividend Payments

One-time payments made by a company to shareholders, often signaling strong financial health or the distribution of extraordinary profits.