Primary restriction of making demand, Financial Accounting

Assignment Help:

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.


Related Discussions:- Primary restriction of making demand

Quarterly cash payments budget, Emily Jackson, RSC Designs management accou...

Emily Jackson, RSC Designs management accountant, is in charge of preparing the master budget for 2013.  She has gathered the following information: 1. Annual profit for the 201

Estimate expected returns, Use the data from "Beating the Market Quarterly"...

Use the data from "Beating the Market Quarterly" problem. Use that data to estimate expected returns and a covariance table for the 5 stocks from that problem. Use your estimates t

How many shares remain after the repurchase, 3:Barnes Baskets, Inc. (BB) cu...

3:Barnes Baskets, Inc. (BB) currently has zero debt. Its earnings before interest and taxes (EBIT) are $100,000, and it is a zero growth company. BB's current cost of equity is

compare the marginal rates of substitution, Consider two individuals with ...

Consider two individuals with endowments of 60 hours per week of leisure, nonlabour income of $Y per week, and a wage of $7.50.  At this wage assume that workers are constrained by

What is permanent negotiating machinery, Q. What is Permanent Negotiating M...

Q. What is Permanent Negotiating Machinery? Two Federation of Union All Indian Railway men's federation (AIRF) & National Federation of Indian Railway (NFIR) men have been reco

The petition-bankruptcy, THE PETITION Petition by debtor : If the de...

THE PETITION Petition by debtor : If the debtor presents his own petition, a receiving order is made at once without a court hearing and an adjudication order may also be ma

Calculate the weighted average cost, The following information is available...

The following information is available about the capital structure of Cheng & Davis Development (CDD). Capital Structure Current Target

Prepare consolidated financial statements, Chambers plc imports household e...

Chambers plc imports household equipment from Germany. On 1 July 2011, the company acquired 60% of the ordinary shares of Court Ltd, which owns a chain of retail shops selling hous

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd