In Terms of the Capital Budgeting Process, Net Cash Flows

question 82

Multiple Choice

In terms of the capital budgeting process, net cash flows are

• A)the net cash outlays required to place a project in service.
• B)the funds invested in additional assets.
• C)incremental changes in a firm's cash flow.
• D)the outlays that have already been made.

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Definitions:

Production Budget

A budget of estimated units to be manufactured to meet budgeted sales and desired inventory levels.

Capital Expenditures Budget

A plan for a company’s spending on fixed assets, such as equipment or property, that will be used over a long period.

Sales Budget

A sales budget is an estimate of the amount of revenue a company expects to generate from sales during a specific period.

Budgeted Direct Materials Purchases

The estimated cost of raw materials a company plans to acquire for use in production during a specific period.