Xon Company Is Planning to Purchase Fixed Assets at a Cost

question 1

Multiple Choice

Xon Company is planning to purchase fixed assets at a cost of $200,000.The planned delivery date is 1st February 2015.A deposit of $10,000 is to be paid on 1/11/14.The amount that will appear in the cash budget for November 2014 is:

• A) $190,000 outflow.
• B) $200,000 outflow.
• C) $10,000 inflow.
• D) $10,000 outflow.

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Definitions:

Significantly Fewer

A term used to describe a noticeably smaller quantity or number of something.

Third-Party Firm

An external organization that provides services or products to another company, not directly connected to the primary business.

Outsourcing

The business practice of hiring a party outside a company to perform services or create goods that traditionally were performed in-house.