3.3

Question 1

How to calculate a 3 month moving average

Answer 1

-Add up 3 months
-Divide by three

Question 2

5 Limits of Quantitative Sales Forecasting

Answer 2

-Seasonality
-Competition
-Publicity
-Market changes
-Changes to legislation

Question 3

Definition of Quantitative Sales Forecasting

Answer 3

Provides an estimation of future sales figures using past data and considering predictable external factors

Question 4

Definition of Investment Appraisal

Answer 4

Comparing the expected future cash flows of an investment with the initial outlay

Question 5

Payback formula

Answer 5

-Count until last negative for years
-Divide next net by current cumulative
-Multiply by 12 for months

Question 6

Formula of ARR

Answer 6

((Total net profit / No. Years) / Initial Cost) *100

Question 7

Formula of NPV

Answer 7

-Multiply net cash flow by Discount Factor
-Add all discounted cash flow with year 0

Question 8

How to calculate a decision tree

Answer 8

-Add all info to tree
-Multiple all percent by P/L
-Add S/F for each decision
-Minus cost of each decision for net gain

Question 9

What is left half of circle of CPA

Answer 9

Activity number

Question 10

What is upper section of circle of CPA

Answer 10

EST

Question 11

What is lower section of circle of CPA

Answer 11

LFT

Question 12

How to calculate EST

Answer 12

Working from node1 add the duration of each task

Question 13

How to calculate LFT

Answer 13

Working backwards from last node subtract the duration of each activity

Question 14

How to calculate the CPA

Answer 14

All nodes that have the same EST and LFT

Question 15

How to calculate Float Time at a node

Answer 15

The difference between top and bottom number

Question 16

How to calculate Float Time for an activity

Answer 16

LFT-Duration-EST

Question 17

3 Limitations of CPA

Answer 17

-Relies on estimates
-Does not guarantee success of a project
-Time and specialists may be needed