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2 years ago

Why is the zero-based budget the most effective type of budget?.

1 answer:

6 0

The zero-based budget is the the most effective type of budget because its keeps the firm aware of how much money is flowing in and out.

<h3>What is a zero-based budget?</h3>

A zero-based budget means a method of budgeting where all the expenses must be explained for each new period.

The zero-based budget is very important because its process ensure that that is a justification for all operating expenses and areas that company are generating revenue.

In conclusion, the zero-based budget is the the most effective type of budget because its keeps the firm aware of how much money is flowing in and out.

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2 years ago

Borghia Pharmaceuticals has $1 million allocated for capital expenditures. a. Which of the following projects should the company

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Answer:

Please refer below the answer in detail

Explanation:

With a limited budget, the firm will first pursue projects with the highest return, and the allocate the remaining capital to the project with the second highest return, and so on until all capital is fully allocated. Based on the information, Project 6 has the highest return, followed by 1 and 3. These three projects together will cost:

350,000 + 300,000 + 250,000 = $900,000

After those three projects, the firm will have $100,000 left. The best out of remaining project is 7, but it costs 400,000, which the firm cannot afford. The best affordable project is 4, which offers a return of 12.1%. Hence, the firm should spend the remaining 100,000 on project 4.

The budget limit constraints the firm to give up project 7, which offers a NPV of $48,000. The firm is forced to choose project 4, which has a NPV of $14,000.

Thus the lost in market value of the firm = 48,000 - 14,000 = $34,000.

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2 years ago

Which of these statements are true about the MIC card? Select all that apply Taco Bell Service Course A. It demonstrates how to

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C. It sets the priorities for your shift

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2 years ago

Spin Cycle Architecture uses three activity pools to apply overhead to its projects. Each activity has a cost driver used to all

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Answer:

The predetermined overhead rate for each activity.

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Cost Drivers: Number of project changes

Expected Use of Cost Driver/Activity = 15

Predetermined overhead rate for activity = Overhead/Cost Driver= 42,200/ 15= $2813

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Cost Drivers :Square feet

Expected Use of Cost Driver/Activity = 38,000

Predetermined overhead rate for activity =Overhead/Cost Driver= 556,000/ 38,000 =$ 14.63

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Cost Drivers: Number of months

Expected Use of Cost Driver/Activity= 105

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3 years ago