Which Budget Should Be Used to Determine Managerial Effectiveness

question 149

Multiple Choice

Which budget should be used to determine managerial effectiveness?

• A)operational budget
• B)capital budget
• C)static budget
• D)flexible budget

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Definitions:

Capital Structure

The composition of a company's liabilities and shareholders' equity including debt, equity, and any other types of financing.

Tax Bracket

A range of income over which the tax rate is constant.

Modigliani-Miller Model

A theory on capital structure that suggests that under certain market conditions (no taxes, no transaction costs), the value of a firm is unaffected by how it is financed.

Restructuring

Restructuring involves modifying the structure or operations of a company, often including changes in financial policies, organizational setup, or business strategy, aimed at increasing profitability or addressing financial challenges.