To Select a Value for α for Exponential Smoothing

question 26

Multiple Choice

To select a value for α for exponential smoothing

• A)use a small α when the series varies substantially.
• B)use a large α when the series has little random variability.
• C)use a value between 0 and 1.
• D)All of these are correct.

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Definitions:

Discount Rate

In DCF analysis, the rate used to calculate the present worth of future cash flows.

NOPAT

NOPAT (Net Operating Profit After Taxes) is a financial metric that calculates a company's potential cash earnings if it had no debt, focusing on its operational efficiency.

Operating Capital

Funds that are used for daily operational activities of a business, essentially the short-term assets minus short-term liabilities.

Cash Bidding Price

The price offered in cash for an asset at an auction or in a competitive bidding situation.