During a recent officer's meeting of Medium Corporation,Inc.,a company that has been in operation for three years,the officers determined that they needed to develop a multi-year plan for financial needs.The officers discussed the new machinery and equipment they would need to handle the growth in operations and replace obsolete equipment,whether they should move the company to a bigger facility or expand the current one,and new products that the company was developing.After lengthy discussion on the matter,they decided that they would expand the current facilities.They assigned the finance officer the task of writing a report translating the plan outlines into hard numbers.What type of report was the finance officer directed to prepare?

Question

Quizplus · Accepted Answer

A capital budget is a financial plan that outlines the long-term investments and spending on capital assets such as machinery, equipment, and buildings. The officers discussed the need for new machinery and equipment as well as the expansion of their current facility, which are capital expenditures. Therefore, the finance officer was directed to prepare a capital budget report that translates the plan outlines into hard numbers. A cash budget records the projected cash inflows and outflows of an organization over a specific period. Zero-base budgeting is a budgeting approach that requires every expense to be justified from scratch or zero. Revenue budget focuses on the projected revenue an organization anticipates over a specific period. None of these options are relevant for the report that the finance officer has been assigned to prepare.

During a Recent Officer's Meeting of Medium Corporation,Inc