You are projecting a firm's future costs as a function of its projected sales. You have the past realizations of the sum COGS+SG&A but not the breakdown between COGS and SG&A. The average of the past realizations of the ratios (COGS+SG&A)/Sales is alfa, where 1>alfa>0. You use the formula COGS+SG&A=alfa*(Projected Sales) to project the firm's future cost. Which of the following propositions hold in this case.

I You will underestimate the firm's cost if projected sales are sufficiently low

II You will overestimate the firm's cost if projected sales are sufficiently low

III You will underestimate the firm's cost if projected sales are sufficiently high

IV You will overestimate the firm's cost if projected sales are sufficiently high

V You are correctly estimating the firm's cost

Group of answer choices

I and IV

V

II and III

I and III