Exhibit 11.1 The Following Questions Use the Data Below

question 9

Multiple Choice

Exhibit 11.1
The following questions use the data below.
Honest Al's Used Cars wants to predict how many cars are sold each month. He has collected data for 12 months. He needs your help in analyzing this data using moving averages.
-Refer to Exhibit 11.1. What is the 4-month moving average forecast for month 5?

• A) 71
• B) 72.5
• C) 74
• D) 75

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Definitions:

Profits

The financial gains that remain after subtracting all expenses from revenue, indicating the financial success of a business.

Operating Leverage

A measure of how sensitive a company's operating income is to a change in its sales volume, indicating the degree to which fixed costs are used in production.

Profits

The financial gain obtained when revenues generated from business activities exceed the expenses, costs, and taxes needed to sustain them.

Demand-Side Economics

An economic theory focused on increasing demand for goods and services as a pathway to economic growth and full employment.