Final answer:
Budgetary slack is the practice of underestimating costs to project an optimistic outlook, but it can result in inaccurate financial planning and decision-making.
Step-by-step explanation:
Budgetary slack is the practice of underestimating costs in order to project an optimistic future outlook. It is a common strategy used by businesses to make their financial performance appear better than it actually is. By intentionally setting lower budget targets, companies create a buffer or slack that can be used to achieve better results and meet or exceed their goals. However, this practice can also lead to inaccurate financial planning and decision-making.