All of the Following Are True About a Cyclical Pattern

question 8

Multiple Choice

All of the following are true about a cyclical pattern except

• A)it is often due to multi-year business cycles
• B)it is often combined with long-term trend patterns and called trend-cycle patterns
• C)it is an alternating sequence of data points above and below the trend line
• D)it is usually easier to forecast than a seasonal pattern due to less variability

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Definitions:

Monthly Sales

The total revenue generated from sales activities within a specific month.

Net Operating Income

A measure of a company's profitability from its regular business operations, excluding revenues and expenses from non-operating activities.

Margin of Safety Percentage

A financial metric indicating the difference between actual or forecasted sales and sales at the break-even point, expressed as a percentage of total sales.

Degree of Operating Leverage

A measure that quantifies the percentage change in a company's operating income resulting from a percentage change in its sales volume.