At What Stage in the Planning and Control Process Should

question 4

Multiple Choice

At what stage in the planning and control process should an organisation first recognise the need to diversify and respond to new market conditions?

• A) Setting objectives
• B) Strategic decisions
• C) Setting budgets
• D) Control

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Definitions:

Discount Rate

The discount rate utilized in determining the present value of future cash flows through discounted cash flow (DCF) analysis.

NPV

Net Present Value, a method used in capital budgeting to evaluate the profitability of an investment by calculating the present value of expected cash flows minus the initial cost.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Capital Rationing

The practice of limiting investments or expenditures in new projects due to budget constraints or capital availability.