Detailed Answer
Answer (B) is correct.
Exponential smoothing is a widespread technique for making projections
because it requires less data to be kept on hand than the moving average
methods. Mathematically, a forecast is arrived at with exponential
smoothing according to the following formula:
Forecast = (Smoothing factor × Previous month result) +
(Smoothing factor complement × Previous month forecast)
= (0.25 × 485,000) + (0.75 × 525,000)
= 121,250 + 393,750
= 515,000