Which of the Following Is NOT One of the Steps

question 30

Multiple Choice

Which of the following is NOT one of the steps taken in the financial planning process?

• A) Assumptions are made about future levels of sales,costs,and interest rates for use in the forecast.
• B) The entire financial plan is reexamined,assumptions are reviewed,and the management team considers how additional changes in operations might improve results.
• C) Projected ratios are calculated and analyzed.
• D) Develop a set of projected financial statements.
• E) Consult with key competitors about the optimal set of prices to charge,i.e. ,the prices that will maximize profits for our firm and its competitors.

Appreciate the role of opportunity costs in project analysis.

Understand the significance of after-tax cash flows in capital budgeting.

Acknowledge the inclusion of final cash flows including salvage value and recovery of net working capital in project assessment.

Differentiate between the types of costs and revenues that affect operating cash flow.

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Definitions:

Equity Method

An accounting technique used to assess investments in which the investor has significant influence over the investee but does not exert full control.

Equity Method

An accounting technique used to record investments in other companies where the investor has significant influence but does not have full control or ownership.

Profit Performance

An assessment of the profitability of a company over a given period, considering revenues, expenses, and net income.