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objective 6 6 1 multinational budgeting is more complex than budgeting in a domestic 4300312

 

Objective 6.6

 

1) Multinational budgeting is more complex than budgeting in a domestic environment due to the possibility of:

A) exchange rate fluctuations

B) sophisticated techniques used by multinationals such as forward, future, and options contracts

C) different political, legal, and economic environments faced by multinationals

D) All of these answers are correct.

 

2) Multinational budgeting is useful for everything EXCEPT:

A) comparing actual to budget in volatile conditions

B) helping managers learn and adapt to changing conditions

C) determining the impact of currency fluctuations

D) determining how well managers adapt to uncertain environments

3) Budgeting for a multinational company is made more complex due to the possibility of exchange rate fluctuations.

 

4) The possibility of exchange rate fluctuations does NOT influence the budgeting procedures in a multinational corporation.

 

5) Because of the possibility of exchange rate fluctuations, managers of multinational corporations should ignore subjective factors in their performance evaluations.

 

Objective 6.A

 

1) To prepare the cash budget, all of the following budgets are required EXCEPT:

A) capital expenditures budget

B) cost of goods sold budget

C) budgeted balance sheet

D) revenue budget

2) Financial analysts use the projected cash flow statement to do all of the following EXCEPT:

A) plan for when excess cash is generated

B) plan for short-term cash investments

C) project cash shortages and plan a strategy to deal with the shortages

D) project depreciation expense

 

3) The cash flow statement does NOT include:

A) cash inflows from the collection of receivables

B) cash outflows paid toward raw material purchases

C) all sales revenues

D) interest paid and received

 

4) The cash budget is a schedule of expected cash receipts and disbursements that:

A) requires an aging of accounts receivable and accounts payable

B) is a self-liquidating cycle

C) is prepared immediately after the sales forecast

D) predicts the effect on the cash position at given levels of operations

Answer the following questions using the information below:

 

The following information pertains to Hepburn Company:

 

MonthSalesPurchases

January$60,000$32,000

February$80,000$40,000

March$100,000$56,000

 

?Cash is collected from customers in the following manner:

Month of sale30%

Month following the sale70%

?40% of purchases are paid for in cash in the month of purchase, and the

balance is paid the following month.

?Labor costs are 20% of sales. Other operating costs are $30,000 per month

(including $8,000 of depreciation). Both of these are paid in the month incurred.

?The cash balance on March 1 is $8,000. A minimum cash balance of $6,000

is required at the end of the month. Money can be borrowed in multiples of $1,000.

 

5) How much cash will be collected from customers in March?

A) $94,000

B) $86,000

C) $100,000

D) None of these answers are correct.

 

 

 

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