Which of the Following Statements Does Not Apply to Preventing

question 5

Multiple Choice

Which of the following statements does not apply to preventing "garbage in, garbage out" when implementing a forecasting game plan?

• A) The quality of the financial statement forecasts will depend on the quality of the forecast assumptions.
• B) The quantities forecasted within financial statement forecasts will depend on the quantity of the forecast assumptions.
• C) Analysts should justify and evaluate the most important assumptions that reflect the critical risk and success factors of the firm's strategy.
• D) Analysts can impose reality checks on the assumptions by analyzing the forecasted financial statements using ratios, common-size, and rate-of-change financial statements.

---

Definitions:

Subsidize

The act of providing financial assistance or support, often by a government to industries, businesses, or individuals, to encourage production, reduce prices, or promote economic goals.

Government

The organization, or agency through which a political unit exercises authority and performs functions and which is usually classified according to the distribution of power within it.

External Benefit

A benefit that affects parties not directly involved in a transaction, leading to positive side effects or externalities.

Harmful Chemicals

Substances that are toxic or dangerous to health and the environment.