Forecasts Are Always Wrong and Therefore

question 31

Multiple Choice

Forecasts are always wrong and therefore

• A)should include both the expected value of the forecast and a measure of forecast error.
• B)should not include both the expected value of the forecast and a measure of forecast error.
• C)should only be used when there are no accurate estimates.
• D)should be missing the expected value of the forecast and a measure of forecast error.

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Definitions:

Useful Life

The estimated period over which a fixed asset is expected to be usable by the company, affecting its depreciation calculation.

Depreciation Percentage

The rate at which a company depreciates an asset, expressed as a percentage of its total value.

Double-Declining-Balance

An accelerated method of depreciation which doubles the usual rate of depreciation of assets, allowing for faster write-offs.

Units-Of-Output

A depreciation method that allocates the cost of an asset over its useful life based on the units it produces, reflecting the asset's wear and tear more accurately.