Capital Budgeting Differs from Cash Budgeting in That

question 20

Multiple Choice

Capital budgeting differs from cash budgeting in that

• A)Cash budgeting focuses on short-term results while capital budgeting focuses on five, ten, or even twenty years in the future.
• B)Cash budgeting focuses on the balance sheet while capital budgeting focuses on the income statement.
• C)A cash budget contains only expected cash outflows for capital assets while capital budgeting includes both cash inflows and outflows.
• D)Cash budgeting is based on cash-basis accounting while capital budgeting is based on accrual-basis.

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Definitions:

Sherman Act

A landmark federal statute passed in 1890 aimed at promoting competition among businesses by prohibiting monopolies and other activities that restrained trade.

Clayton Act

A U.S. law enacted in 1914 aimed at promoting competition by preventing mergers and acquisitions that could significantly reduce market competition.

Tying Contracts

Agreements where the seller conditions the sale of one product on the purchase of another product.

Price Discrimination

The strategy of selling the same product at different prices to different segments of consumers.