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Why do businesses spend time, effort, and money to produce forecasts? Explain.Businesses succeed or fail relies on how well organized they are to deal with the situations they confront in the future. Hence they expend considerable sums by making estimates (forecasts) of what the future situation is similarly to be. Businesses develop new products, set production quotas, and choose financing sources based on forecasts about the future economic environment and the firm's circumstances. If economists expect interest rates will be comparatively high, for instance, firms may plan to limit borrowing and defer expansion plans.
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