Question

Select four approaches to building a budget.

a) Capital
b) Cash-flow
c) Operational
d) Bottom-up
e) Incremental
f) Top-down
g) Zero-based

Answer 1

There are four approaches to building a budget in business: capital, cash-flow, operational, and zero-based budgeting.

Step-by-step explanation:

In budgeting, there are different approaches to building a budget. Four common approaches include:

1. Capital budgeting: This approach involves estimating the costs and benefits of long-term investment projects, such as buying new equipment or expanding facilities.
2. Cash-flow budgeting: This approach focuses on managing and projecting the inflow and outflow of cash within a specific time period to ensure sufficient funds are available.
3. Operational budgeting: This approach involves budgeting for day-to-day operational expenses, such as salaries, utilities, and supplies.
4. Zero-based budgeting: This approach requires justifying and evaluating each expense from scratch, regardless of past budget levels.