These statements are proper to the budgeting process except A It is part of management's responsibility to plan the use of its resources 8. It is a tool to orchestrate the various functions of operations in a business C. The involvement of various levels of individuals in the company is necessary to gain acceptance and attain its goals. D. Actual results need not be compared with plan, since the process ends after the budget is approved

Problem 9-25 Fudge factors An oil company executive is considering investing $10.1 million in one or both of two wells: well 1 is expected to produce oil worth $3.01 million a year for 10 years; well 2 is expected to produce $2.01 million for 15 years. These are real (inflation-adjusted) cash flows. The beta for producing wells is 0.91. The market risk premium is 9%, the nominal risk-free interest rate is 7%, and expected inflation is 3%. The two wells are intended to develop a previously discovered oil field. Unfortunately there is still a 21% chance of a dry hole in each case. A dry hole means zero cash flows and a complete loss of the $10.1 million investment. Ignore taxes and make further assumptions as necessary. a. What is the correct real discount rate for cash flows from developed wells? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Real discount rate b. The oil company executive proposes to add 20 percentage points to the…

Is there a way you can provide an example for number 3?

what is 2 plus eight ?