Which statement accurately describes how renewal probability and term length affect ARR forecasting?

Which statement accurately describes how renewal probability and term length affect ARR forecasting?

• A. They have no impact on forecast accuracy.
• B. Renewal probability estimates the likelihood of renewal; term length locks ARR for a longer period; both improve forecast accuracy.
• C. They are primarily used for non-recurring revenue.
• D. They only affect the first forecast period.

Answer: (B)