The projected statement of financial position method assumes that the key ratios are constant, which means, for example, that if you plotted a graph of inventories versus sales, the regression line would be linear and would have a positive Y-intercept.

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The statement is inaccurate as the projected statement of financial position method does not make any assumptions regarding the key ratios being constant, and the graph of inventories versus sales may not necessarily have a linear regression line or a positive Y-intercept.

The Projected Statement of Financial Position Method Assumes That the Key