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Chapter 7

Q. 7.CR.7

Under what conditions is zero-base budgeting useful?

Step-by-Step

Verified Solution

Zero-based budgeting is useful when there is new management resulting in a greater need of information flow. New outside managers often bring changes in strategy, such that prior budgets are no longer as relevant. Zero-based budgeting provides information about budget items in light of these changing goals and strategies.