Budgetary slack provides managers with a hedge against unexpected adverse circumstances.

Name: Budgetary slack provides managers with a hedge against unexpected adverse circumstances.
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Question

Quizplus · Accepted Answer

Budgetary slack refers to intentionally underestimating revenues or overestimating expenses in a budget to create a cushion or hedge against unexpected adverse circumstances. This provides managers with flexibility in case actual results fall short of expectations. Therefore, the statement is true.

Budgetary Slack Provides Managers with a Hedge Against Unexpected Adverse