Primary restriction of making demand, Financial Accounting

Q. Primary restriction of making demand?

The primary restriction of making demand forecasts lies in the fact that they are forecasts and hence their reliability is unknown. Most predicts are based upon a mix of historic information and expectations in relation to relevant influential variables. For instance the exchange rate predicts where the highest probability is attached to a rate of 1·54 Euro/£ is probable to be based on the statistical pattern of historic exchange rates including the standard deviation such that 1·54 Euro/£ constitutes the most frequently observed rate. This doesn't but necessarily means that the rate will be similar in the future - history doesn't always repeat itself.

Another restriction relates to the nature of the data being forecast. Weather forecasts are notoriously undependable because nature is such an uncontrollable force. Even if the UK climate has been hot on average for the past five years doesn't imply that this will be the case in the future. The factors which utter the weather are uncontrollable and consequently to a large degree unpredictable.

The forecast as well runs into problems because it seeks to link two unrelated variables. The state of the weather is completely independent of the exchange rate and vice versa as well as they can only be linked in the way suggested by the table if the range of alternative observations is restricted. This is eventually a distortion of a reality which is far more complex.

Posted Date: 7/11/2013 5:52:35 AM | Location : United States







Related Discussions:- Primary restriction of making demand, Assignment Help, Ask Question on Primary restriction of making demand, Get Answer, Expert's Help, Primary restriction of making demand Discussions

Write discussion on Primary restriction of making demand
Your posts are moderated
Related Questions
Don and Harvey began operations as a partnership on October 3, 2010. The company spent $60,500 on organization costs that year. How much can the company deduct in 2010 relating to

DO ACCOUNTANTS EVER REALLY MAKE IMPORTANT DESIONS?

tyoes of assets

what are methods of calculating depreciation?

Q. Assembly of Financial Statements? Assembly of Financial Statements -Providing of various accounting or data-processingservices by an accountant, output of which is in the fo

The government of a country has just issued a series of zero-coupon bonds maturing at the end of years 1, 2, 3 and 4. Suppose the spot rates (or continuously compounded yields per

Investors need a 15% rate of return on Brooks Sisters' stock (rs = 15%). a.  What would the value of Brooks's stock be if the last dividend was D0 = $1.5 and if investors expect

You are preparing and income statement and analysis of retained earnings for Pacioli Wholesale Corporation for the years ended June 30, 2011 and 2012 based on the following informa

Explain in detail about the Sole proprietorship Sole proprietorship, as the name suggests, is where an individual is the sole owner of a business. This type of business is ofte

Below are excerpts from Safeway's 2010 Annual Report, including its Consolidated Balance Sheets, a portion of Note E, Lease Obligations, and Note H, Taxes on Income, from the Notes