Which of the Following Statements Regarding fiNancial Planning Is Accurate

question 345

Multiple Choice

Which of the following statements regarding financial planning is accurate?

• A) Financial planning insures a firm will not be surprised by unforeseen future events.
• B) By using financial planning, a firm can clearly identify its options for the coming fifteen years.
• C) The use of financial planning allows a firm to eliminate the interactions between its operating policies and its financing policies.
• D) Financial planning allows a firm to plan for the future in a systematic fashion.
• E) Financial planning takes the burden off the financial manager and places it on the operations manager who must carry out the plan as laid out.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed, varying according to the amount of income or profit made.

Unrealized Gain

Represents the increase in value of an investment or asset that has not yet been sold for cash.

Commercial Substance

A concept in accounting that a transaction has commercial substance if it significantly changes the economic circumstances of the entities involved.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task or business activity.