One Basic Weakness of the Simplified Pro Forma Approaches Lies

question 179

True/False

One basic weakness of the simplified pro forma approaches lies in the assumption that certain variables, such as cash, accounts receivable, and inventories, can be forced to take on certain "desired" values.

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Definitions:

Marginal Physical Product

The addition to total output due to the employment of one more unit of a factor, other factors held constant.

Marginal Output

The additional quantity of output that is produced as a result of using one more unit of a particular input, assuming all other factors of production remain constant.

Marginal Physical Product

The change in output resulting from employing one more unit of a particular input, all else being constant.

Productivity

The measure of the efficiency of production, often evaluated as the ratio of output to inputs in the production process.