What Is the Starting Point in Preparing a Master Budget

question 9

Multiple Choice

What is the starting point in preparing a master budget?

• A)the production budget
• B)the sales budget
• C)the direct labour budget
• D)the purchases budget

---

Definitions:

Accounting Beta

A measure of the sensitivity of a company's operating income to changes in the economy or its sector, used for risk assessment in strategic planning.

Beta

The measure of market risk in portfolio theory. The degree to which a stock’s return moves with the market’s return.

Cost of Capital

The vital rate of earnings a company must generate from its investment plans to preserve its standing in the market and appeal for investments.

Treasury Bills

Short-term government securities with maturities ranging from a few days to 52 weeks, sold at a discount from their face value.