As his firm's accounting manager, Jack is trying to estimate expected sales revenue and operating expenses for the coming year. In order to do this as accurately as possible, which example below best illustrates how he should proceed?

He should subtract the cumulative surplus from previous budgets in order to arrive at a predictable outcome.

He should compare the current budget against the previous year's performance records.

He should compare target cash balances with ending cash balances from previous years.

He should research previous budgets of similar firms in the same industry.