Financial Modeling and Forecasting

Question 1

The floor in a transfer pricing decision is

Answer 1

opportunity cost + costs of outlay

Question 2

ceiling in a transfer pricing decision

Answer 2

should be the market price

Question 3

Actual Transfer price

Answer 3

should fall between the ceiling and the floor

Question 4

Types of business forecasting methods

Answer 4

1) observed relationships
2) historical data
3) predictions of customer behavior

Question 5

analysis based on observed relationships include

Answer 5

Regression analysis

range from high-low method to multiple regression analysis

Question 6

methods based on historical data

Answer 6

1) Moving average

2) exponential smoothing methods

Question 7

methods based on predictions of customer behavior

Answer 7

1) Markov techniques

2) polling

Question 8

Net operating income is the difference between

Answer 8

revenues and operating expenses.

Question 9

Net income is the difference between

Answer 9

revenues (and gains) and expenses (and losses).

Question 10

Gross margin (also called gross profit) is the difference between

Answer 10

revenue and cost of goods sold.

Question 11

Contribution margin is the difference between

Answer 11

revenue and variable expenses