All of the following points are true regarding the key principles of forecasting except: Select one: a. Financial statement forecasts must rely on assumptions that have external validity b. Financial statement forecasts must be internally consistent c. Financial statement forecasts need not be comprehensive d. Forecasts should not manifest wishful thinking

Critically explain each one of the following financial terms:i. Asymmetric informationii. Moral hazardiii. Adverse selectionGive examples in each case to illustrate your answer.

Forecasting risk can be defined as the possibility that _____ will lead to incorrect decisions. a. the inclusion of opportunity costs b. erosion c. errors in projected cash flows d. the exclusion of sunk costs e. net working capital costs

What is the historical cost principle and how does it impact financial reporting? Provide an example of how the historical cost principle might lead to distorted financial statements.