A Disadvantage of the Visual-Fit Method to Approximate a Cost

question 12

Multiple Choice

A disadvantage of the visual-fit method to approximate a cost function is ________.

• A) it does not use all the available data
• B) it is costly to apply
• C) it does not capture the general tendency of the data
• D) the placement of the line is subjective

---

Definitions:

Long-Term Financing

Funding obtained for a time period exceeding one year, used for acquiring or investing in long-duration assets.

Conservative

In finance, conservative refers to an investment strategy or financial decision-making approach that prioritizes preservation of capital and minimizes risk.

Net Working Capital

The disparity between an organization's immediate assets and liabilities, showcasing its financial stability in the short-term.

Accounts Payable

Short-term liabilities or the money a company owes to suppliers or vendors for goods and services that were purchased on credit.