A Danger of Forecasting Discussed in the Text Is That

question 63

Multiple Choice

A danger of forecasting discussed in the text is that

• A) in most cases, the expense of collecting the necessary data exceeds the benefit
• B) forecasting's retrospective nature provides little information about the future
• C) managers may view uncertainty as "black and white" while ignoring important "grey areas"
• D) it can create legal problems for the firm if regulators discover the company is making forecast

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Definitions:

Acquisition Method

An accounting technique used in consolidating the financial statements of a group involving a parent and its subsidiaries, recognizing and measuring the assets acquired and liabilities assumed at their fair value on the acquisition date.

Purchase Method

An accounting method used in mergers and acquisitions where the purchasing company records the assets and liabilities of the acquired company at fair market value.

Consolidated Balance Sheet

A financial statement that shows the aggregated financial position of a parent company and its subsidiaries.

Minority Interests

Shareholders' equity in a subsidiary not wholly owned by the parent company, representing minority shareholders' proportion.