Traditional Budgeting Method How do rolling forecasts enhance traditionalbudgeting methods?a) Quarterly reviews are eliminatedb) Annual budgets remain unchangedc) Regular updates replace rigid annual predictionsd) Long-term plans become fixed

Rolling forecasts offer the flexibility to incorporate real-time data and develop dynamic business…

Answered: How do rolling forecasts enhance…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter6: Managing Cash Flow

Section6.4: Projected Monthly Financial Statements

Problem 1CC

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Flexible budgets have the characteristics of what?
Consider the following time series: a. Construct a time series plot. What type of pattern exists in the data? Is there an indication of a seasonal pattern? b. Use a multiple linear regression model with dummy variables as follows to develop an equation to account for seasonal effects in the data: Qtr1 = 1 if quarter 1, 0 otherwise; Qtr2 = 1 if quarter 2, 0 otherwise; Qtr3 = 1 if quarter 3, 0 otherwise. c. Compute the quarterly forecasts for next year.
Consider the following time series data: Construct a time series plot. What type of pattern exists in the data? Use a multiple regression model with dummy variables as follows to develop an equation to account for seasonal effects in the data: Qtr1 = 1 if quarter 1, 0 otherwise; Qtr2 = 1 if quarter 2. 0 otherwise; Qtr3 = 1 if quarter 3, 0 otherwise. Compute the quarterly forecasts for next year based on the model you developed in part (b). Use a multiple regression model to develop an equation to account for trend and seasonal effects in the data. Use the dummy variables you developed in part (b) to capture seasonal effects and create a variable t such that t = 1 for quarter 1 in year 1, t = 2 for quarter 2 in year 1, … t = 12 for quarter 4 in year 3. Compute the quarterly forecasts for next year based on the model you developed in part (d). Is the model you developed in part (b) or the model you developed in part (d) more effective? Justify your answer.
What can government (if anything) do to adapt to the changes before the end of fiscal year if their forecast goals are not met?
Define the terms relative-performance (relative-improvement) contract and rolling financial forecast. What role for these is envisioned by critics of the traditional budgeting process?
A method of budgeting that estimates todays value of money to be received in the future; it is discounted due to the uncertainty of its true value in the future and for the cost of the capital is______________. Select one: a. Discounted cash flow. b. Payback period c. None of the options d. Cash inflow. e. Cash outflow. Clear my choice
Ethical Considerations. Budget projections always involve a degree of judgment because managers can neverpredict the future with total accuracy. For instance, onemanager with an optimistic view and another with apessimistic view could look at the same set of facts andarrive at distinctly different conclusions about the company’s financial prospects. When budgets will influencedecisions made by investors or lenders, how should thepeople who prepare the budgets deal with the variancebetween optimistic and pessimistic viewpoints? On theone hand, being too pessimistic could result in lowerlevels of funding, which could be detrimental to employees, existing investors, existing creditors, and otherfinancial stakeholders. On the other hand, being toooptimistic could be detrimental to prospective investors or creditors. How do you find the right balance?
Consider the following time series data: Compute MSE using the most recent value as the forecast for the next period. What is the forecast for month 8? Compute MSE using the average of all the data available as the forecast for the next period. What is the forecast for month 8? Which method appears to provide the better forecast?
A cash flow budget can be used to A. estimate when and how much money will need to be borrowed during the year B. estimate when and how much debt can be repaid during the year C. estimate when excess cash may be available so plans can be made to invest it D. all of the above
Which of the following is NOT a problem associated with traditional line-item budgets? Absence of program value measurement Single-year cost orientation The fallacy of appellation Inability to control input usage
In generating their forex forecasts, NAB economists would have made a number of assumptions.These may or may not hold. For instance, take the AUD/USD forecast. Outline factors or eventsthat may render the forecasts inaccurate.
8) A balanced budget occurs when a) transfer payments equal tax revenues. b) a budget deficit during one year is matched by a budget surplus in the next year. c) government expenditures equal tax revenues. d) the national debt is reduced to zero dollars. 9) The interest rate effect is one of the a) shifters of an AD curve. b.) reasons why a short-run aggregate supply curve can be derived. c) reasons why an AD curve is downward-sloping. d) shifters of a short-run aggregate supply curve. 10) The real balance effect explains the change in a) the output producers produce as they attempt to balance their production in response to changes in consumers' demand. b) the value of physical assets (e.g., houses) that results from a change in the price level. c) the real wealth that results from a change in the amount of income earned. d) the real wealth that results from a change in the price level.

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How do rolling forecasts enhance traditional budgeting methods? a) Quarterly reviews are eliminated b) Annual budgets remain unchanged c) Regular updates replace rigid annual predictions d) Long-term plans become fixed