BV Dis 5 - does not account for changes in growth rates...

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How is the need to have alternative scenarios related to uncertainty? Unceeteianiity is risk. Any program or process which is uncertain as to its performance is risky because the outcome is generally not known and hence neither be quantified nor qualified as to its performance metrics. Since there is uncertainty involved it is always better to have alternatives for the same. Any alternative should have the same festers as that of the original plan and should be easily adaptable alternate scenarios can work well if the original fails and it is always better to plan for alternate and execute it well. instead of waiting for failure and then working on a new one. 2. Why is the continuing value estimate a less reliable forecast than the near-term (explicit) forecast? A continuing value estimate gives values based on growth rates continually which are based again on the original value. Since this is based on original rate and original growth forecasts this
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Unformatted text preview: does not account for changes in growth rates intermittently and hence unreliable. The near term explicit forecasts deal with growth rates incrementally and hence are more reliable. 3. What differing factors must enter into generating a forecast for a chemical product firm such as Dow Chemical versus a retailing firm such as Wal-Mart? Dow Chemicals Is a raw material firm and hence the cost structure and forecast are independent measures of availability of chemicals which is a raw material in itself and hence forecasts are raw material based. a store like Wall-mart which is a retail store uses forecasts of finished goods and relies very heavily on manufacture of finished goods which are again subject to availability o basic raw material. Hence there are 2 steps in forecast for a retail store while it is just one step of forecast in a chemical store....
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This note was uploaded on 02/21/2012 for the course ACT 492 taught by Professor Ngo during the Fall '11 term at Colorado.

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