Final answer:
The budget projections high low technique is a method used in budgeting to estimate both the highest and lowest amounts that a certain budget item can reach. It helps businesses prepare for different financial situations and make informed decisions.
Step-by-step explanation:
The budget projections high low technique is a method used in budgeting to estimate both the highest and lowest amounts that a certain budget item can reach. This technique involves creating three scenarios: a best-case scenario, a worst-case scenario, and a most likely scenario. By considering these different scenarios, a business can gain a better understanding of the potential range of outcomes and make more informed decisions about their budget.
Using the budget projections high low technique is important because it helps businesses prepare for different financial situations. By considering the best-case, worst-case, and most likely scenarios, businesses can identify potential risks and opportunities. This technique allows for more accurate financial planning and helps businesses make informed decisions to achieve their financial goals.