Where Budget Targets Have Proven to Be Unrealistically Optimistic, Management

question 63

Multiple Choice

Where budget targets have proven to be unrealistically optimistic, management is best advised to:

• A) insist that junior management conform to budgets.
• B) revise budgets to match actual results.
• C) revise budgets into the realm of achievability.
• D) ignore budgets and allow managers to use their own initiative.

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Definitions:

Acquisition Cost

The total cost associated with purchasing an asset, including the price and all other costs to prepare the asset for use.

Salvage Value

The anticipated amount an asset will fetch when sold at the conclusion of its useful lifespan.

Illuminate

To light up or brighten a space; in a metaphorical sense, it can also mean to clarify or make something clear and understandable.

Paving Cost

Expenses related to the laying of a pavement, including materials and labor.