Use the Information Below to Answer the Following Question(s)

question 173

Multiple Choice

Use the information below to answer the following question(s) .Boone Hobbies, a wholesaler, has a sales budget for next month of $600,000.Cost of units sold is expected to be 40 percent of sales.All units are paid for in the month following purchase.The beginning inventory of units is $20,000, and an ending amount of $24,000 is desired.Beginning accounts payable is $152,000.
-A rolling budget is a budget or plan that

• A)rolls several budgets together for forecasting purposes.
• B)has one budget category roll into the next category.
• C)rolls all budget categories together into a master budget.
• D)is always available for a specified future period by replacing time periods as the lapse.
• E)is not used to guide operations.

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Definitions:

Firm's Cost of Capital

The minimum return that a company must earn on its investments to maintain its market value and satisfy its creditors and investors.

Specific Division

A distinct business unit within a larger organization, often focused on a particular product line or market segment.

Risk Averse Manager

A manager who prioritizes minimizing risks in decision-making and strategy, favoring safer investments with potentially lower returns.

Discount Rate

The interest rate used to discount future cash flows of a financial asset to their present value, often used in NPV calculations.