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Question
The projected balance sheet forecasting method produces accurate results unless which of the following condition(s) is (are) present?
a. Fixed assets are "lumpy."
b. Strong economies of scale are present.
c. Excess capacity exists because of a temporary recession.
d. Answers a, b, and c all make the projected balance sheet method inaccurate.
e. Answers a and c make the projected balance sheet method inaccurate, but, as the text explains, the assumption of increasing economies of scale is built into the projected balance sheet method.
Answer
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