Financial Planning Models ________

question 185

Multiple Choice

Financial planning models ________.

• A) are not used in the budgeting process
• B) are not useful for sensitivity analysis
• C) are mathematical representations of the relationships affecting the budget process
• D) are used for nonfinancial aspects of budgeting

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Definitions:

Expected Monetary Value

A statistical technique in decision making used to calculate the average outcome when the future includes scenarios that may or may not happen.

Pessimist Criterion

A decision-making strategy used under conditions of uncertainty, where the decision maker prepares for the worst-case scenario to minimize losses.

Expected Monetary Value

A mathematical method for determining the mean result when future events include both possible and impossible outcomes.

Profiling Machine

A machine used in manufacturing to shape or outline parts or materials according to a predetermined profile, commonly used in metalworking and woodworking.