Which of the following is true of the financial plan in a reasonably well managed company?
A)The plan should ideally follow the aggressive optimism strategy.
B)The plan should establish measurable goals which result in bonus compensation if achieved.
C)Its stretch goals serve as targets toward which the organization strives and always achieves.
D)Its stretch goal faces a risk of overstating achievable performance because of the bottom-up phenomenon.

Question

Quizplus · Accepted Answer

The financial plan in a reasonably well-managed company should establish measurable goals that result in bonus compensation if achieved. This incentivizes employees to work towards achieving the goals outlined in the plan. Option A is incorrect as the plan should not always follow the aggressive optimism strategy, as it can lead to unrealistic expectations and poor decision-making. Option C is incorrect as stretch goals serve as targets towards which the organization strives, but they may not always be achieved. Option D is incorrect as bottom-up phenomenon can lead to the understating of achievable performance, not overstating.

Which of the Following Is True of the Financial Plan