Which of the Following Statements Regarding the Objective and Task

question 65

Multiple Choice

Which of the following statements regarding the objective and task method of determining expenditure levels for selling expense categories is true?

• A) It is probably the most popular method for establishing selling budgets.
• B) This method calculates an expenditure level for each category by multiplying an expenditure percentage times forecasted sales.
• C) This method uses typical expenditure percentages provided by readily available published sources.
• D) Each sales manager prepares a separate budget request; these are reviewed and through an iterative process selling budgets are approved.
• E) This method separates out the major accounts, which are then budgeted for individually.

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Definitions:

Cash Flow Growth Rate

The rate at which a company's cash flow from operations grows over a specific period.

Timeframe

A specific period during which events, processes, or conditions occur or are scheduled to take place.

Required Rate Of Return

The required rate of return is the minimum annual percentage earned by an investment that will induce individuals or companies to put money into a particular security or project.

Expected Rate Of Return

The profit or loss one anticipates on an investment over a certain period of time, expressed as a percentage.