Suppose That the Departmental Manager Deliberately Underestimates the Level of Sales

question 32

Multiple Choice

Suppose that the departmental manager deliberately underestimates the level of sales activity by 10 000 units. What is this practice called?

• A) Budgetary participation
• B) Appropriate caution
• C) Budgetary slack
• D) Allowance for uncertainty

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Definitions:

Capital Investment

Funds invested in a business or project for the purpose of furthering its objectives, typically involving the purchase of physical assets.

Cash Payback Period

The period of time required for the cash inflows from a project or investment to repay the initial cash outlay.

Estimated Life

The expected duration over which an asset is likely to be operational and useful.

Obsolescence

Obsolescence refers to the process or condition by which an object, service, or practice loses its value or utility due to aging, technological advancements, or changes in market preferences.