Which Form of Budgeting Involves Taking a Fixed Percentage of Some

question 31

Multiple Choice

Which form of budgeting involves taking a fixed percentage of some criterion such as sales as the basis for the research budget?

• A) Rule-of-thumb budgeting
• B) Percentage-of-sales budgeting
• C) Departmental budgeting
• D) Task budgeting
• E) functional-area budgeting

---

Definitions:

Net Investment

The total amount spent by a company for purchasing new assets, after accounting for depreciation.

Gross Investment

The total amount spent on purchases of new capital and on replacing depreciated capital within an economy.

Net Investment

The sum of money used to purchase new capital assets, subtracting the depreciation from current capital assets.

Depreciation

The reduction in the value of an asset over time, due in particular to wear and tear.