Budgeting That Involves Decisions Such as Whether to Buy or Lease

question 13

Multiple Choice

Budgeting that involves decisions such as whether to buy or lease equipment or build a new factory is referred to as:

• A) capital budgeting.
• B) operations budgeting.
• C) facilities planning.
• D) strategic planning.

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Definitions:

Defined Benefit Pension Plan

A type of pension plan where an employer promises a specified pension payment upon retirement, based on the employee's earnings history and tenure.

Return On Plan Assets

A measure of the earnings generated from the investments within a pension fund, indicating the efficiency and performance of the asset management.

Pension Expense

The cost recognized in an employer's financial statements for the benefits provided to employees during a period.

Defined Contribution

A type of retirement plan where the amount invested is defined, but the future benefits are not guaranteed and depend on investment performance.