6 The soal of a Cash Budget is to a. Forecast the actual amount of cash expected
ID: 2590655 • Letter: 6
Question
6 The soal of a Cash Budget is to a. Forecast the actual amount of cash expected to be collected b. Forecast the actual amount of cash expected to be spent c. Only A d. Both A &B; Utilizing the Net Present Value method of evaluating a capital project must include: 5.07 a. Consideration of the time value of money b. The results of a complete Payback Method analysis to be valid c. Disregarding the future cash flows of the project d. All of the above 5.08 The Accounting Rate of Return method: a. Focuses on GAAP income b. Considers the time value money c Only 8 d. Both A &B; 5.09 The Static Budget: a. Is prepared for only one level of sales volume b. Contains multiple scenarios c. Is considered more useful than Flexible Budgets d. Is never meant to be analyzed 5.10 Variances in materials and labor rates are caused by: a. b. c. d. Imprecise estimates Laziness of manufacturing workers Primarily accounting errors Material or Labor shortagesExplanation / Answer
Answer 5.06
d Both A & B
Explanation : A cash budget determines a firm's cash inflows & cash out flows for a specified period.
Answer 5.07
a) Consideration of time value of money
Explanaion : Under NPV method present value of all future cash flows are considered using time value of money & it does not take into account the result under py back method.
Answer 5.08
a. Focuses on GAAP income:
Explanation : under accounting rate of return is method only accounting income is consider & time value of money is ignored
Answer 5,09
a) prepared for only one level of sales volume
Explanation : The satic budget does chanhe with the changing level of activities . It remains constant on the of the sales volume based on which it is prepared.
Answer 5.10
d) Material or labour shortage :
Explanation :Due to shortage of material or labour the rates of material or labour may go high which results in variation from the standard rate estimated
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