Question

Which of the following statements is not highlighting the importance of financial planning:

• A. It helps in forecasting what may happen under different business situations.
• B. It helps in avoiding business shocks and surprises and helps the company in preparing for the future.
• C. It provides a link between investment and financing decisions on a continuous basis.
• D. Detailed plans of action prepared under financial planning increase waste, duplication of efforts, and gaps in planning.

Hint:

Effective financial planning ensures stability, resource optimization, and better decision-making for businesses.

Answer 1

The Correct Option is D

Step 1: Understanding Financial Planning
Financial planning ensures the effective allocation of resources and minimizes risks associated with uncertainties.
Step 2: Identifying the Incorrect Statement
- (A) Financial planning helps businesses predict future scenarios.
- (B) It reduces financial uncertainties and business shocks.
- (C) It links investment and financing decisions for long-term stability.
- (D) The claim that financial planning increases waste and inefficiency is incorrect.
Conclusion: The correct answer is (mathbf{(D)}), as financial planning enhances efficiency rather than increasing waste.