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Alexeev081 [22]
4 years ago
11

When we use the AFN equation to forecast the additional funds needed (AFN), we are implicitly assuming that all financial ratios

are constant. If financial ratios are not constant, regression techniques can be used to improve the financial forecast.
A) True
B) False
Business
2 answers:
slavikrds [6]4 years ago
7 0

Answer:

Yes it is true that if financial ratios are not constant, regression techniques can be used to improve the financial forecast.

Explanation:

Additional funds needed (AFN) is calculated as the excess of required increase in assets over the increase in liabilities and increase in retained earnings.

Additional funds needed method of financial planning assumes that the company's financial ratios do not change.

Assuming that financial ratios are constant, Regression analysis will compare the independent variables as it related to the dependent variable which will be used for prediction and improve financial forecasting.

sergeinik [125]4 years ago
5 0

Answer:

A True

Explanation: Since Additional funds needed (AFN) is calculated as the excess of required increase in assets over the increase in liabilities and increase in earnings retained . Hence regression will be the best option to work things out.

Regression : This is a statistical process for evaluating the relationships between the dependent variables or criterion variables and one or more independent variables or predictors. Regression analysis describes the changes in criterions in relation to changes in select predictors. Regression techniques includes the following :

1) Logistic regression

2) Linear regression

3) Polynomial regression

4)Stepwise regression

5) Stepwise regression

6) Elastic Net regression

7) Lasso regression

8) Ridge regression

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A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 19%, while stock B has a standard
tangare [24]

Correlation coefficent =  0.5356

<u>Explanation:</u>

Portfolio variance = (Standard of stock A * Weightage of stock A)2 + (Standard of stock B * Weightage of stock B)2 + 2 * (Standard of stock A * Weightage of stock A) * (Standard of stock B * Weightage of stock B) * Correlation coefficent.

0.034=(19 \% * 0.70)^{2}+(25 \% * 0.30)^{2}+2 * 19 \% * 0.70 * 25 \% * 0.30 * Correlation coefficent

By calculating the above equation, we get,

=> Correlation coefficent =  0.5356

3 0
3 years ago
At the current prices of goods X and Y, the quantity demanded of good X is 10 units, and the quantity demanded of good Y is 5 un
damaskus [11]

Answer:

When the price of good y increases by 10% it will result in the quantity demanded of x to increase by (0.6*10) =6%. The current quantity demanded of good x is 10 so a 6% increase will mean the quantity demanded of x will be (1.06*10)= 10.6

Explanation:

The cross elasticity of goods x and y is 0.6, which means that a one percent increase in price of good y will increase the demand for good x by 0.6%, this means that x and y are substitute goods, as when the price of y increases people tend to buy more of x.

When the price of good y increases by 10% it will result in the quantity demanded of x to increase by (0.6*10) =6%. The current quantity demanded of good x is 10 so a 6% increase will mean the quantity demanded of x will be (1.06*10)= 10.6

8 0
4 years ago
The cost of land would not include: Multiple Choice Purchase price. Cost of parking lot lighting. Costs of removing existing str
Annette [7]

The cost of land would not include option(a) i.e, the Cost of parking lot lighting.

<h3>What is meant by the cost of land?</h3>

The asset valuation method that is used to value land that appears on a company's balance sheet is known by the financial accounting term cost of land. The price of the land would cover all costs incurred in purchasing the property as well as those incurred in getting it ready for usage by the business.

The price of the land might be calculated by adding the purchase price, the local government's appraisal of the property, deducting the cost of any existing structures, and title insurance premiums.

All expenses incurred to prepare the improvements for use are included in the cost of land improvements. For instance, the cost of the parking lot is just the agreed-upon fee when two businesses enter into a contract to build one on the other's property.

To know more about cost of land refer to: brainly.com/question/26383713

#SPJ4

6 0
3 years ago
Imagine you are the marketing manager for a U.S. manufacturer of disposable diapers. Your firm is considering entering the Brazi
Radda [10]

Answer:

1) The firm should not use the same advertisements in the U.S. and Brazil because culture plays an important role in advertising, and the cultures of both countries are very different. Something that is culturally acceptable in the U.S. might no be so in Brazil and viceversa, and advertisements usually make use of cultural references to build rapport with the potential customers.

When determining the local prices in Brazil, management should take advice from local managers but it should still try to determine the final prices only after doing extensive market research.

2) I do not agree. On the contrary, it is likely that we will see a trend toward increasing product customization. This is because more countries are becoming wealthier (for example, China and India), and as a consquence, people now have more disposable income than before, and can be more demanding when it comes to the products they buy.

3) Depending on the country, the job experience for expatriates can be very difficult. Language is probably the most common hardship, if the expatriate does not speak well the language of the host country, then he will likely have a very hard time in the workplace.

Cultural shock, lack of personal relationships, and a general lack of knowledge about how things work can also cause problems.

Companies should train employees before they are sent abroad. They should try to send employees who speak the language of the country if possible, and if not, help them learn a few basics at least. Companies should also instruct their employees about the general culture, geography, laws, and customs present in the country of destination.

5 0
3 years ago
In a small open economy, output (gross domestic product) is $25 billion, government purchases are $6 billion, and net factor pay
Zolol [24]

Answer:

Consumption is given.

Investment is also given.

Government spending is $6 billion.

GDP is $25 billion.

National Saving = GDP - Consumption - Government spending

Foreign lending = Savings - Investment

Absorption = Consumption + Investment + Government spending

Net Exports = GDP - Absorption

The relationship/ correlation between Net Exports and Foreign Lending is one that is <u>perfectly positive</u> as both measures are exactly the same.  

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3 years ago
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