Which would be credible supporting detail for a forecasted net income?
A)Net income is based on management's goals.
B)Net income is based on a "booming" economy.
C)Net income is based on competitive pricing and industry averages for profit margins.
D)Net income is generated based on a higher profit margin than most other competitors.

Question

Quizplus · Accepted Answer

Competitive pricing and industry averages for profit margins provide a factual and objective basis for forecasting net income. Management's goals (A) and a booming economy (B) may be factors, but they are not necessarily reliable or verifiable indicators of future net income. Option D is also a possibility but lacks the specificity and comparability provided by industry averages.

Which Would Be Credible Supporting Detail for a Forecasted Net