The Weakness of the Judgmental Approach to Preparing a Pro

question 12

Multiple Choice

The weakness of the judgmental approach to preparing a pro forma balance sheet is ________.

• A) the assumption that the values of certain accounts can be forced to take on desired levels
• B) the assumption that the firm faces linear total revenue and total operating cost functions
• C) the assumption that the firm's past financial condition is an accurate predictor of its future
• D) ease of calculation and preparation

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