The 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

The cash budget and the capital budget are interrelated and should be developed in conjunction with one another to ensure proper financial planning and management. The capital budget outlines the investments in long-term assets while the cash budget focuses on short-term cash inflows and outflows. However, a company's capital budget decisions can impact its cash position, and vice versa, which is why they should be developed together.

The Cash Budget and the Capital Budget Are Handled Separately