Which of the Following Is Not a Step in Forecasting

question 42

Multiple Choice

Which of the following is not a step in forecasting sales for a seasoned firm?

• A) forecast future growth rates based on possible scenarios and the probabilities of those scenarios.
• B) attempt to corroborate the projected sales growth rates analyzing both industry growth rates and the firm's own past market share.
• C) refine the sales forecast by using the sales force as a direct contact with both existing and potential customers.
• D) take into consideration the likely impact of major operating changes within the firm on the sales forecast.
• E) consider the effects of changes in the firm's debt/equity blend on the sales forecasts.

---

Definitions:

Actual Sales

This refers to the actual revenue generated from the sale of products or services, as opposed to projected sales or forecasts.

Break-even Point

The point at which total revenues equal total costs, meaning the company neither makes a profit nor incurs a loss.

Variable Costs

Costs that vary directly with the level of production or with volume of services provided.

Fixed Costs

Fixed costs are expenses that do not vary with the level of production or sales within a certain range, such as rent, salaries, and insurance.