The Function of a Budget Includes to

question 16

Multiple Choice

The function of a budget includes to

• A) indicate the amount and time of future financing needs.
• B) provide a basis for corrective action.
• C) provide information for performance evaluations.
• D) all of the above.

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Definitions:

Sunk Costs

Costs that have already been incurred and cannot be recovered or altered and should not affect current and future business decisions.

Erosion Costs

Costs incurred when a new project or product negatively impacts the sales and profits of existing products or services.

Operating Cash Flow

The money a company makes from core business activities excluding costs associated with financing or investments.

Salvage Value

The estimated resale value of an asset at the end of its useful life, reflecting what a company expects to recover to offset initial costs.