Suppose That Demand in Period 1 Was 7 Units and the Demand

question 114

Multiple Choice

Suppose that demand in period 1 was 7 units and the demand in period 2 was 9 units. Assume that the forecast for period 1 was for 5 units. If the firm uses exponential smoothing with an alpha value of .20, what should be the forecast for period 3? (Round answers to two decimal places.)

• A) 9.00
• B) 3.72
• C) 9.48
• D) 5.00
• E) 6.12

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Definitions:

Liquidity

The ability of an asset to be quickly converted into cash or an entity's capacity to meet its immediate and short-term obligations.

Unusual Items

Non-recurring or uncommon transactions that are outside the usual business operation, which might distort the financial statements if not separately disclosed.

Income Statement

A financial statement that reports a company's financial performance over a specific period of time, detailing revenues, expenses, and profits or losses.

Ratio Analysis

A financial analysis method that involves calculating and interpreting financial ratios from statements to assess a company's performance, liquidity, efficiency, and profitability.