If the Behavioral Approach Is Employed to Determine the Levels

question 80

True/False

If the behavioral approach is employed to determine the levels at which budgeted amounts are set,then reasonable and achievable levels should be used.

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Definitions:

Free Cash Flow (FCF)

The money a business produces once it has subtracted the funds used to sustain its operations and keep up its capital assets.

Weighted Average Cost of Capital (WACC)

The rate that a company is expected to pay on average to all its security holders to finance its assets, a measure of the cost of capital.

Intrinsic Value

The inherent, actual value of an asset, determined by internal characteristics and fundamentals, rather than current market price.

Closely Held Corporation

A corporation owned by a small group of people who might also be involved in its management, with shares that are not publicly traded.