cash budget and the capital budget are handled separately, and although they are both important, they are developed completely independently of one another.

Question

Quizplus · Accepted Answer

Cash budget and capital budget are interrelated and must be developed in coordination with each other as they both involve allocating financial resources. The cash budget is prepared to ensure that the company has enough cash to meet its daily operational needs, while the capital budget is prepared to make long-term investments in fixed assets such as property, plant, and equipment. A company cannot develop an effective capital budget without considering its cash position and vice versa.

Cash Budget and the Capital Budget Are Handled Separately, and Although