Why Are Budgets Useful in the Planning Process

question 177

Multiple Choice

Why are budgets useful in the planning process?

• A) They provide management with information about the company's past performance.
• B) They help communicate goals and provide a basis for evaluation.
• C) They guarantee the company will be profitable if it meets its objectives.
• D) They enable the budget committee to earn their paycheck.

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Definitions:

Interval Variables

Variables which not only have an order but also a precise numerical distance between their values, similar to interval data but in a context emphasizing variable types.

Normal Distributions

This probability distribution is defined by its symmetrical structure around the mean, revealing that data points closer to the mean have greater frequencies than those positioned further away.

Wilcoxon Rank

A non-parametric statistical test that compares two paired groups, based on ranking the differences between pairs and used when the data does not necessarily conform to a normal distribution.

Null Hypothesis

A hypothesis that assumes no significant difference or effect, serving as a default position until evidence indicates otherwise.