Cost-Volume-Profit Analysis Is Used to Predict Future Costs to Be

question 186

True/False

Cost-volume-profit analysis is used to predict future costs to be incurred, volumes of activity, sales to be made, and profit to be earned.

---

Definitions:

Future Cash Receipts

Expected inflow of cash to a business as a result of its operational activities, investments, or financing.

Installment Note Payment

Payments made regularly on a loan that includes both interest and a portion of the principal.

Interest Portion

The part of a payment or financial obligation that represents the cost of borrowing or the charge for the service of using someone else's money.

Carrying Amount

Also known as book value, this is the value of an asset as recorded in the company's balance sheet, after deducting accumulated depreciation or amortization.