It Is Difficult to Engage in Long-Term Financial Planning When

question 122

Multiple Choice

It is difficult to engage in long-term financial planning when inflation is:

• A)high and erratic.
• B)low and stable.
• C)accounted for through indexing.
• D)predictable.

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Definitions:

Variable Costs

Costs that change in proportion to the level of production or activity, such as materials and labor.

Sales

The transactions involving the exchange of goods or services for money.

Contribution Margin Ratio

A financial metric that measures how much of a company's revenue is left over after variable costs to cover fixed costs and generate profit.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, and insurance premiums.