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Planning Process, Forecast, Budgeting, Projection, Cash

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1. The key input to the short-run financial planning process is

1. 1. the cash budget.
2. 2. the pro forma income statement.
3. 3. the cash forecast.
4. 4. the sales forecast.

2.________ forecast is based on a buildup, or consensus, of sales forecasts through the firm's own sales channels, adjusted for additional factors such as production capabilities.

1. 1. An internal sales
2. 2. An external sales
3. 3. A sales
4. 4. A pro forma

3. In cash budgeting, the ________ seasonal and uncertain a firm's cash flows, the ________ the number of budgeting intervals it should use.

1. 1. less; greater
2. 2. more; fewer
3. 3. more; greater
4. 4. less; fewer

4. The ________ is a financial projection of the firm's short-term cash surpluses or shortages.

1. 1. capital assets journal
2. 2. strategic financial journal
3. 3. cash budget
4. 4. operating financial plan

5. Cash flows that result from debt and equity financing transactions, including incurrence and repayment of debt, cash inflows from the sale of stock, and cash outflows to pay cash dividends or repurchase stock are called

1. 1. operating flows.
2. 2. investment flows.
3. 3. financing flows.
4. 4. none of these.

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Solution Summary

1. The key input to the short-run financial planning process is

1. 1. the cash budget.
2. 2. the pro forma income statement.
3. 3. the cash forecast.
4. 4. the sales forecast.

2.________ forecast is based on a buildup, or consensus, of sales forecasts through the firm's own sales channels, adjusted for additional factors such as production capabilities.

1. 1. An internal sales
2. 2. An external sales
3. 3. A sales
4. 4. A pro forma

3. In cash budgeting, the ________ seasonal and uncertain a firm's cash flows, the ________ the number of budgeting intervals it should use.

1. 1. less; greater
2. 2. more; fewer
3. 3. more; greater
4. 4. less; fewer

4. The ________ is a financial projection of the firm's short-term cash surpluses or shortages.

1. 1. capital assets journal
2. 2. strategic financial journal
3. 3. cash budget
4. 4. operating financial plan

5. Cash flows that result from debt and equity financing transactions, including incurrence and repayment of debt, cash inflows from the sale of stock, and cash outflows to pay cash dividends or repurchase stock are called

1. 1. operating flows.
2. 2. investment flows.
3. 3. financing flows.
4. 4. none of these.

Solution Preview

1. 4. The sales forecast: All of the company's budgets are based upon its sales forecast. This forecast drives the production budget, administrative expense budget, capital purchase budget, and cash budget.

2. 1. An internal ...

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