Although It Is Extremely Difficult to Make Accurate Forecasts of the Revenues

question 6

True/False

Although it is extremely difficult to make accurate forecasts of the revenues that a project will generate,the project's initial outlays and subsequent costs for large projects can be forecasted with great accuracy.

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Definitions:

High-low Method

The high-low method is a straightforward way to estimate the variable and fixed components of a cost by using the highest and lowest activity levels and the corresponding total costs.

Machine Hour

A unit of measurement that represents an hour of operation of a machine or equipment.

Fixed Costs

Expenses that do not change in proportion to the level of production or sales, such as rent and salaries.

High-low Method

A technique used in accounting and finance to estimate fixed and variable costs based on the highest and lowest levels of activity.