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A competitive firm:
Traditional Budgeting
An approach to budgeting focusing on incremental changes to the previous year's budget rather than starting from zero.
Activity-Based Budgeting
A budgeting approach that considers the underlying activities and costs as the bases for budgets, focusing on cost drivers.
Non-Value-Added Activities
Processes or actions that do not add value to the product or service from the customer's perspective, potentially leading to unnecessary costs.
Rolling Budgets
A financial planning method that continuously updates by adding a new budget period as the current period is completed, ensuring a constant planning horizon.
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