Which of the Following Statements About a Budget Is Correct

question 56

Multiple Choice

Which of the following statements about a budget is correct?

• A) It is an entity's short-term plan expressed quantitatively.
• B) It is an entity's long-term plan expressed quantitatively.
• C) Budget targets are always impossible to meet.
• D) Budgets must be prepared by all types of entities.

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Definitions:

Cash Flow

Total funds inflow and outflow within a business and its effect on liquid assets.

WACC

Weighted Average Cost of Capital; a calculation used to estimate the cost of financing a company's assets, blending debt and equity costs.

MIRR

Modified Internal Rate of Return, which adjusts for the differences in reinvestment rates of a project's cash flows.

Project

A temporary endeavor undertaken to create a unique product, service, or result with defined objectives and constraints.