The Following Rule Applies When Preparing the Cash Budget

question 83

True/False

The following rule applies when preparing the cash budget.If available cash plus net cash receipts and disbursements is negative,then borrowing is necessary.

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Definitions:

Incremental Costs

Costs that change as a result of a new decision or alternative action, also known as marginal costs.

Incremental Costs

Incremental costs are the additional costs incurred when a business increases its level of operations or production.

Make or Buy

A decision-making process used by companies to determine whether to produce goods in-house or purchase them from an external supplier.

Incremental Costs

Costs that change depending on the level of production or an alternative course of action.