QUESTION 1 The main advantage of deterministic models is that they allow the use
ID: 2653662 • Letter: Q
Question
QUESTION 1
The main advantage of deterministic models is that they
allow the user to maximize or minimize some objective function
allow the user to perform sensitivity analyses quickly
allow the user to maximize some objective function
provide the user with more useful information than other models
10 points
QUESTION 2
In those industries where capacity can be added only in discrete or “lumpy” increments, fixed assets are increased in a ____ manner as sales increase.
stepwise
proportional
discriminant
direct relationship
10 points
QUESTION 3
The percentage of sales forecasting method is used by management to forecast the amount of
profit expected for a given percentage increase in sales
cash needed to finance future sales growth
capital financing needed to promote marketing efforts
debt financing needed
10 points
QUESTION 4
The first step in the preparation of a cash budget is:
Estimation of cash receipts
Estimation of future stock sales
Estimation of asset value
Estimation of future spending
10 points
QUESTION 5
Pro forma financial statements show the results of some ____ event rather than a (an) ____ event.
actual; assumed
assumed; actual
deterministic; probabilistic
none of the above
a.allow the user to maximize or minimize some objective function
b.allow the user to perform sensitivity analyses quickly
c.allow the user to maximize some objective function
d.provide the user with more useful information than other models
Explanation / Answer
QUESTION 1
The main advantage of deterministic models is that they
b) allow the user to perform sensitivity analyses quickly
Note :
Deterministic models is a single -number forecast in a financial variable or variable without stating anything about its probability of occurance.Deterministic models is useful approximation of reality & Senstivity analysis.It perform Senstivity analysis quickly & easily.
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