Which of the Following Statements Concerning the Cash Budget Is

question 68

Multiple Choice

Which of the following statements concerning the cash budget is CORRECT?

• A) Cash budgets do not include financial items such as interest and dividend payments.
• B) Cash budgets do not include cash inflows from long-term sources such as the issuance of bonds.
• C) Changes that affect the DSO do not affect the cash budget.
• D) Capital budgeting decisions have no effect on the cash budget until projects go into operation and start producing revenues.
• E) Depreciation expense is not explicitly included, but depreciation's effects are reflected in the estimated tax payments.

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Definitions:

Hindsight Bias

The tendency to believe, after learning an outcome, that one would have foreseen it, often referred to as the "I-knew-it-all-along" effect.

Placebo Effect

A phenomenon where an improvement in health or wellbeing is observed after receiving a treatment that has no therapeutic value, due to the individual's belief in its efficacy.

Illusory Correlation

refers to the cognitive bias where a relationship between two variables is perceived to exist when no such relationship actually exists.

Double-Blind Procedure

A experimental setup in which neither the participants nor the experimenters know who is receiving a particular treatment, preventing bias in the results.