Answer
Following are some of the arguments against earning projections;
1. Earnings projections are never precise and do not take into account any uncertainties. Such projections are often based on assumptions and information about the future, which is never predictable.
2. These projections limit the vision of management and employees, as they are stuck with such forecasts. They strive to merely meet the targets set in such forecasts.
3. Forecasts can have a demotivating effect. If forecasts are not met there is a sense of failure, and if met, the management becomes complacent and does not strive for even better performance.
4. Forecasts reveal many of the company's plans to its competitors. For highly profitable project forecasts, competitors might enter the market to compete for company's customers/clients.
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