• 1 Marks

AAA – L3 – SA – Q2.9 – Profit Estimates

Term for conditional profit estimate.

An estimate of what the profit is likely to be if certain conditions occur or certain events happen is called:

A   a profit forecast

B   a profit projection

C   budgeted profit

D   target profit

B

Explanation:
A forecast is what is expected to happen, while a projection will only occur if certain events or actions take place. A budgeted profit is a planned amount, and a target profit is set by management for achievement. An estimate based on specific conditions is a profit projection, making B the correct answer.

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