Budgeting and Forecasting

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Question

What does predictive analytics try to do in planning?

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Answer

Use models to forecast outcomes like demand or default.

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Question

Why are learning curves relevant in forecasting?

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Answer

They predict lower average cost as cumulative output doubles.

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Question

What is the decision rule in cost-benefit analysis?

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Answer

Proceed if incremental benefits exceed incremental costs.

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Question

When is the percentage-of-sales method most useful?

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Answer

For pro forma statements and external financing needs.

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