One Basic Weakness of the Simplified Pro Forma Approaches Lies

question 110

True/False

One basic weakness of the simplified pro forma approaches lies in the assumption that the firm's past financial condition is an accurate indicator of its future.

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Definitions:

Mere Exposure

A mental effect where individuals grow fond of things simply because they are accustomed to them.

Reciprocal Helping

A cooperative behavior where an individual helps another with the expectation that the favor will be returned in the future.

Altruism

The act of providing help when it is needed, with no apparent reward for doing so.

Social Facilitation

The tendency for individuals to perform differently when in the presence of others than when alone, typically improving performance on simple or well-practiced tasks.