Answer the following statements true (T) or false (F)
1. A capital expenditures budget is prepared before the operating budgets.
2. The selling expenses budget is normally prepared before the sales budget because selling expenses affect the amount of sales.
3. The sales budget comes from a careful analysis of forecasted economic and market
conditions, business capacity, and advertising plans.
4. To develop the sales budget, companies must estimate both unit sales and the production cost per unit.
5. A manufacturing budget shows dollar amounts estimated to be spent to purchase additional plant assets and amounts expected to be received from plant asset disposals.
1. FALSE
2. FALSE
3. TRUE
4. FALSE
5. FALSE
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An Employer Identification Number (EIN) is needed for
a. submitting insurance premiums to insurance companies; b. all payroll forms sent to the IRS; c. W-4 forms; d. all of these reasons; e. none of these reasons.
In a capital budgeting decision, sensitivity analysis can be performed on all of the following except:
a. the cash flow. b. the discount rate. c. the life of the asset. d. the weighted average cost of capital.
The quick ratio
A) is used to quickly determine a company's leverage and long-term debt-paying ability. B) relates cash, marketable securities, and net receivables to current liabilities. C) is calculated by taking one item from the income statement and one item from the balance sheet. D) is the same as the current ratio except it is rounded to the nearest whole percent.
Courts usually will require evidence for a transaction to be usurious. What factors will the courts require as evidence of usury?