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Why do businesses spend efforts to generate forecasts

Why do businesses spend effort, time and money to generate forecasts?  Describe.
Businesses succeed or fail based on how well prepared they are to deal along with the situations they confront in the future. Hence they expend considerable sums making estimates (forecasts) of what the future circumstances is likely to be. Businesses build up new products, set production quotas, and choose financing sources based on forecasts regarding the future economic environment and the firm's condition. If economists predict interest rates will be relatively high, for instance, firms may plan to restrict borrowing and defer expansion plans.

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