Financial Forecasts Are Required by Lenders Since They Will Want

question 72

True/False

Financial forecasts are required by lenders since they will want to know how they will be paid back;investors will use the forecasts to value the company.

---

Definitions:

Marginal Propensity

The ratio of a change in consumption (or saving) to a change in income, indicating how much of an income change individuals will spend or save.

Disposable Income

The amount of money available for savings or expenditure after all taxes and social security fees have been deducted.

Induced Consumption

Consumption that changes in response to changes in income or wealth, as opposed to autonomous consumption, which does not change when income changes.

Disposable Income

The amount of money that households have available for spending and saving after income taxes have been deducted.