The president of a medium-sized electronics company is evaluating the financial forecasts and proposed funding program by the Chief Financial Officer presented. The forecasts are prepared in constant dollars, on the basis of the proposed financing plan seems reasonable. However, if inflation is included in the forecasts, the financing needs well beyond available funding sources and adjustment in the operational area is necessary. The danger of a single set of forecasts o … Read more »

The president of a medium-sized electronics company is evaluating the financial forecasts and proposed funding program by the Chief Financial Officer presented. The forecasts are prepared in constant dollars, on the basis of the proposed financing plan seems reasonable. However, if inflation is included in the forecasts, the financing needs well beyond available funding sources and adjustment in the operational area is necessary. The danger is based on a single set of predictions about the likely outcome also shown.
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Thomas R. Piper
Source: Harvard Business School
10 pages.
Release date: 01 November 1974. Prod #: 275058-PDF-ENG
Science and Technology Co. HBR case solution