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21 August, 19:23

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?

a.

Zero-base budgeting

b.

Capital budget

c.

Cash budget

d.

Revenue budget

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Answers (1)
  1. 21 August, 21:21
    0
    Capital budget

    Explanation:

    Capital budget is a formal process of evaluating whether to invest available funds for acquisition of new assets, modification of existing assets or even disposal of assets towards expansion and new investment in order to have an understanding of related risks and rewards to the potential investment.

    This describes the assignment given to the finance officer at Medium corporation.
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