BFIN Test 2 - Questions with Correct Verified
Answers
Which one of these serves as the basis for financial planning?
Pro forma financial statements
What are base case assumptions?
The most reasonable set of assumptions upon which a firm's financial plan is based
Which one of these is the first value estimated when starting to form a financial plan?
Expected future sales
The naive approach is based on which one of these assumptions?
Future sales will equal those of the latest observed period
What does MAPE stand for?
Mean absolute percentage error
What is the definition of financial planning?
The process of mapping out the future cash inflows and outflows of a firm
The Corner Market has compiled its monthly sales for 2012 through 2014. Assume it is
January 1, 2014 and you use the naive approach for estimating sales. When computing
MAPE for the 2014 year, what value should be used as the forecast variable in the MAPE
formula?
December 2013 sales
, Base case projections are intended to represent which one of these?
The outcome most expected by a firm
Which of these are questions that are addressed by a financial plan? Select all that apply.
The amount of new assets which must be acquired
The amount of external funding needed in excess of supplier funding
The expected increase in supplier funding
Assume the monthly sales for September through December for the current year have been
$30,000, $34,000, $38,000, and $31,000, respectively. What value should be used for the
monthly sales for the upcoming year based on the naive approach?
$31,000
The naive approach to sales forecasting will tend to work best for which one of these
situations?
A firm with fairly level sales
True or false: If MAPE indicates that a particular forecast method worked well in the past,
then you can be assured it will also work well in the future.
False
What is the name of the type of errors the average approach is designed to reduce as
compared to the naive approach?
Idiosyncratic errors
Answers
Which one of these serves as the basis for financial planning?
Pro forma financial statements
What are base case assumptions?
The most reasonable set of assumptions upon which a firm's financial plan is based
Which one of these is the first value estimated when starting to form a financial plan?
Expected future sales
The naive approach is based on which one of these assumptions?
Future sales will equal those of the latest observed period
What does MAPE stand for?
Mean absolute percentage error
What is the definition of financial planning?
The process of mapping out the future cash inflows and outflows of a firm
The Corner Market has compiled its monthly sales for 2012 through 2014. Assume it is
January 1, 2014 and you use the naive approach for estimating sales. When computing
MAPE for the 2014 year, what value should be used as the forecast variable in the MAPE
formula?
December 2013 sales
, Base case projections are intended to represent which one of these?
The outcome most expected by a firm
Which of these are questions that are addressed by a financial plan? Select all that apply.
The amount of new assets which must be acquired
The amount of external funding needed in excess of supplier funding
The expected increase in supplier funding
Assume the monthly sales for September through December for the current year have been
$30,000, $34,000, $38,000, and $31,000, respectively. What value should be used for the
monthly sales for the upcoming year based on the naive approach?
$31,000
The naive approach to sales forecasting will tend to work best for which one of these
situations?
A firm with fairly level sales
True or false: If MAPE indicates that a particular forecast method worked well in the past,
then you can be assured it will also work well in the future.
False
What is the name of the type of errors the average approach is designed to reduce as
compared to the naive approach?
Idiosyncratic errors
