Forecasting methods in accessing business plans

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Fred Smith of Dodge City Bank has received many loan applications from local small businesses. The applications are supported through many documentation, including the business plans of the companies. Each applicant has submitted forecasts of sales and profits for his or her business. Smith must decide which (if any) loans to approve. Because the ability of the firms to pay off the loans depends on the accuracy of the forecasts, he is especially concerned. He has called on you, his newly hired assistant, to help determine the reliability of the forecasts. What do you tell him about these forecasts and their accuracy to help him make his decision?

Reference no: EM1375126

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