1. Suppose that your firm's last net cash flow equaled $40,000 and the last forecast for net cash flow is unknown. However, you know that the exponential smoothing forecast value was $75,000. Given an alpha of 0.3, what is the last period's forecasted value?
a. $57,500
b. $77,000
c. $99,000
d. $90,000
2. Suppose that your firm's last net cash flow equaled $50,000 and the last forecast for net cash flow was $65,000. Given an alpha of 0.4, what is the forecast for the next net cash flow by using an exponential smoothing approach?
a. $59,000
b. $67,000
c. $57,500
d. $56,000