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The percentage of sales method has been used to forecast the firm's financial statements. Sup-pose one of the senior executives asked you what assumptions are

The percentage of sales method has been used to forecast the firm's financial statements. Sup-pose one of the senior executives asked you what assumptions are implied when one uses the percentage of sales method. That is, under what circumstances would the percentage of sales method produce a valid, as opposed to an incorrect, forecast? How would you answer?

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