Why do businesses spend time effort and money, Financial Management

Assignment Help:

Why do businesses spend time, effort, and money to produce forecasts?  Explain.

Businesses fail or succeed depending on how well prepared they are to deal with the situations they confront in the future.  Thus they expend considerable sums making approximation (forecasts) of what the future situation is likely to be.  Businesses develop fresh products, set production quotas and select financing resource based on forecasts about the future economic environment and the firm's condition.  If economists forecast interest rates will be relatively high, for instance, firms may plan to defer expansion and limit borrowing plans.

 


Related Discussions:- Why do businesses spend time effort and money

What do you mean by financial leverage, Q. What do you mean by Financial Le...

Q. What do you mean by Financial Leverage? Financial Leverage: - The financial leverage perhaps defined as the tendency of the residual net profit to vary disproportionately wi

Steps in budgetary control, STEPS IN BUDGETARY CONTROL 1. Quantificati...

STEPS IN BUDGETARY CONTROL 1. Quantification of plans in relation to sales, production, distribution and finance in terms of objectives and goals set by the management. That i

Define a currency futures contract, Q. Define a currency futures contract? ...

Q. Define a currency futures contract? A currency futures contract is a standardised contract for the buying or else selling of a specified quantity of currency. It is traded o

Financial capital, Assume that you have just "run out of money" and are una...

Assume that you have just "run out of money" and are unable to move your "idea" from its development stage to production and the startup stage.  However, you remain convinced that

Credit enhancement of asset-backed security, Credit enhancement of an...

Credit enhancement of an asset-backed security implies the existence of support for one or more of the bondholders in the structure. Credit enhancement levels var

Financial market, Financial Market: Being entrusted with different func...

Financial Market: Being entrusted with different functions having macro level implications on the nation's economy, the financial system tries to fulfill its role through the f

What is diversification, Diversification A  strategy  which tends to mo...

Diversification A  strategy  which tends to move  into  new  products  and  new  markets  in  which  organisation is unfamiliar with. Related for example vertical forwar

What do you meant by negative externalities, Question 1: i) Is ther...

Question 1: i) Is there a stable and inverse link between unemployment and inflation? ii) The government announces that expansionary policies will be enacted in a view

The investment of public pension monies, Question: (a) The key determin...

Question: (a) The key determinants of investment decisions in the public sector are:- legal, political and financial factors. Show the importance of each determinant when de

Illustration of valuation using multiple discount rates, Illustration  ...

Illustration  Let us assume that Vishal Mehta & Co., (from Illustration 1) is using the following discounting rates in place of one rate:

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd