Life-Cycle Budgeting

question 99

Multiple Choice

Life-cycle budgeting:

• A)gives companies more insight into total costs when manufacturing costs consume the majority of the resources.
• B)is most useful to companies that manufacture small items such as household plastics.
• C)has little in common with target pricing.
• D)helps companies estimate revenues over a multi-year horizon.

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Definitions:

Cash Dividend

A payment made by a company out of its earnings to its shareholders in cash.

Financing Activities

Transactions that involve raising funds to finance the company's operations and repaying debt; part of a firm's financial operations detailed on the statement of cash flows.

Principal Repayment

The portion of a loan payment that goes toward reducing the original amount borrowed, not including interest.

Financing Activities

Transactions that result in changes in the size and composition of the equity capital or borrowings of a company.