In the Development of a Cash Budget, Which of the Following

question 26

Multiple Choice

In the development of a cash budget, which of the following elements must be determined first?

• A) Ending balance of Accounts Receivable
• B) Direct materials purchases
• C) Estimated sales in units
• D) Cash for payroll

---

Definitions:

Simulation Analysis

involves using mathematical models to replicate a real-world system or process in order to predict outcomes or assess the impact of different variables on that system.

Operating Leverage

A measure of how sensitive a company's operating income is to a change in its sales volume, highlighting the impact of fixed costs.

Automobile Manufacturing

The industry involved in the design, development, production, marketing, and selling of motor vehicles.

Sensitivity Analysis

A procedure for examining the repercussions that different magnitudes of an independent variable have on a dependent variable, within the context of predetermined assumptions.