Some Weaknesses in Financial Planning Models Include

question 66

Multiple Choice

Some weaknesses in financial planning models include:

• A) Interest expense is not accounted for.
• B) All working capital accounts do not necessarily vary directly with sales, especially cash and inventory.
• C) How fixed assets are adjusted.
• D) All of the above are weaknesses.

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Definitions:

Interest

The cost of borrowing money or the payment received for the use of money, typically expressed as an annual percentage rate.

Original Principal

The initial amount of money borrowed or invested, not including any interest or earnings.

Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, thereby eroding purchasing power.

Future Date

A specified time in the future, often used in the context of planning, forecasting, or setting deadlines.