- CFA Exams
- CFA Level I Exam
- Study Session 11. Corporate Finance (2)
- Reading 35. Working Capital Management
- Subject 2. Managing the Cash Position
CFA Practice Question
Which of the following is the most appropriate technique for forecasting cash flow for the short term?
B. Simple projections
C. Projection models and averages
A. Statistical models
B. Simple projections
C. Projection models and averages
Correct Answer: B
Simple projections are used to forecast short-term needs. Projection models and averages are normally used to forecast medium-term cash flow needs. Statistical models are normally used to forecast long-term needs, not short-term cash flow needs.
User Contributed Comments 2
User | Comment |
---|---|
khalifa92 | not mentioned here or in the text book |
khalifa92 | nah its mentioned |