Which of the following statements concerning the cash budget is CORRECT?

Question

Quizplus · Accepted Answer

Depreciation expense is not explicitly included in the cash budget, but its effects are reflected in the estimated tax payments. This is because depreciation is a non-cash expense that reduces taxable income, which in turn reduces the amount of taxes the company needs to pay in cash. The other statements are incorrect. Choice A is incorrect because interest and dividend payments are cash outflows that need to be included in the cash budget. Choice B is incorrect because cash inflows from long-term sources such as bond issuances should be included in the cash budget. Choice C is incorrect because changes that affect the dso (days sales outstanding) do affect the cash budget, as they can impact the timing and amount of cash inflows. Choice D is incorrect because capital budgeting decisions can have an immediate impact on the cash budget through the cash outflows associated with the initial investment in the project.

Which of the Following Statements Concerning the Cash Budget Is