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Which of the following is a benefit of budgeting?

A) It helps investors to value stocks.
B) It helps managers gather information for improving future performance.
C) It helps managers to take marketing decisions.
D) It helps in increasing market capitalization of the company.

User Bumkyu
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Final answer:

Budgeting benefits a company by aiding managers in gathering information to improve future performance and make wiser financial decisions. It helps in forecasting and controlling costs effectively.

Step-by-step explanation:

Among the given options, the benefit of budgeting is that it helps managers gather information for improving future performance. Budgeting is a critical tool for managing a company's financial resources effectively. It assists in forecasting income and expenditures, thereby guiding managers in decision-making processes, setting financial goals, and ensuring that the company remains on track to meet those goals.

A good budget not only helps to monitor the money coming in and out, but it also identifies areas where costs can be trimmed, ensuring resources are allocated optimally for growth and sustainability. While budgeting does provide insights that can be helpful to investors, its primary function within a company is to aid in internal management decisions rather than directly affecting stock valuation or market capitalization.

User Artie
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