A company is preparing a sales budget. The budget planners believe that the volume of sales next year will depend on the state of the economy.

$\backslash$table$[[$State of the economy,Sales for the year million$],[$No growth,$40],[$Low growth,$50],[$Higher growth,$70]]$

It has been estimated that there is a $60\%$ probability of no growth, a $30\%$ probability of low growth and a $10\%$ probability of higher growth.

a$)$ Advise the company on what the sales budget should be

b$)$ Discus the usefulness or otherwise of using probabilities and expected value calculations in sales forecasting

c$)$ Discuss the use of Spreadsheets, stress testing or 'what if$\text{'}$ analysis in Management Accounting. $(173-177)$