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The starting point in the budgeting process is the preparation of what?
cash budget
Should financing cost be included as an incremental cash flow in capital budgeting analysis?
Incremental Cash flows are included in capital budgeting decision and if capital budgeting decisions require acquisition of money from open market then its financial cost is also relevant for decision making and it is also included in it.
Why does capital budgeting look at cash flows and not net income?
Affect of net income is hard to determine due to any specific assets that's why capital budgeting decision making involves cash flows to determine cost and benefit analysis.
Why do Depreciation expenses affect capital budgeting analysis by increasing?
it is increasing the incremental cash flow
What are the difference between cash budgeting and capital budgeting?
capital expenditure budget is a part of cash budget.cash budget involves managerial activities while capital expenditure budget involves day to day activities may be for long range or short range
The starting point in the budgeting process is the preparation of what?
cash budget
Should financing cost be included as an incremental cash flow in capital budgeting analysis?
Incremental Cash flows are included in capital budgeting decision and if capital budgeting decisions require acquisition of money from open market then its financial cost is also relevant for decision making and it is also included in it.
What Capital budgeting decisions usually involve analysis of?
cash outflows only
What are the advantages of using predetermined overhead rates?
The benefits of using predetermined overhead rates is that budgeting and allocation of cash flows become easier. It also helps the firm to conserve resources to stay within a budget.
What is a good budgeting tool that is free to download?
Ace Money Lite, Microsoft Money Sunset Deluxe, Buddhi, Gnu Cash, PL Cash, Financial Fate and SimpleD Budget are good budgeting tools, which are free to download.
Why does capital budgeting look at cash flows and not net income?
Affect of net income is hard to determine due to any specific assets that's why capital budgeting decision making involves cash flows to determine cost and benefit analysis.
Why do Depreciation expenses affect capital budgeting analysis by increasing?
it is increasing the incremental cash flow
Maximizing benefits and minimizing costs?
Lay offs / downsizing of staff personal budgeting
What are the difference between cash budgeting and capital budgeting?
capital expenditure budget is a part of cash budget.cash budget involves managerial activities while capital expenditure budget involves day to day activities may be for long range or short range
What are some benefits of budgeting?
By budgeting, you can have a semblance between your income and projected expenditure during a specified period.This is of paramount importance than sailing a rudderless boat in the sea.
What is capital budgeting analysis?
Capital budgeting analysis is the analysis of all cash inflows and outflows related with the underlying asset purchase decision to evaluate the cost and benefit of purchase of asset.
Why does capital budgeting rely on analysis of cash flows rather than on net income?
Cash flow rather than net income is used in capital budgeting analysis because the primary concern is with the amount of actual dollars generated. For example, depreciation is subtracted out in arriving at net income, but this non-cash deduction should be added back in to determine cash flow or actual dollars generated.
