The financial plans should be realistic but also flexible in order to give future direction to the corporate and serve as benchmark. However, in order to prepare financial plans, some assumptions should be made in relation with the variables including, but not limited to inflation, economic growth, sales growth, foreign exchange rates etc. It is a fact that during the planning horizon those assumptions may fail. The planning process should be designed to be revised periodically to reflect the effects of those changes to the financial plans. The assumptions used may be:

• The effectiveness and length of cash conversion cycle
• The sales and collection policies,
• Capital budgeting techniques,
• The cost of capital and its revisions depending on the financial circumstances,
• Target capital structure,
• The cash dividend policy,
• The tendency to finance the working capital needs by short-term borrowings

Therefore, the correct option is D.