An Unfavorable Static Budget Variance for Operating Income May Be

question 132

Multiple Choice

An unfavorable static budget variance for operating income may be due to ________ or ________.

• A)unfavorable revenue variance; unfavorable cost variance
• B)unfavorable revenue variance; favorable cost variance
• C)favorable revenue variance; unfavorable cost variance
• D)all of the above

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Definitions:

Non-normal Cash Flows

Cash flows that do not follow a regular or predictable pattern over time, often seen in investments with variable returns.

Initial Costs

Initial expenses required to start a project, including setup, acquisition, or investment costs.

MIRR

Modified Internal Rate of Return, a financial measure used to assess the attractiveness of investments, adjusting for the cost of capital and considering the reinvestment of cash flows.

NPV

Net Present Value, a method used in investing to calculate the difference between the present value of cash inflows and outflows over a period of time.