2. Should depreciation expense be explicitlyincluded in the cash budget? Why or why not?
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2. Should depreciation expense be explicitly
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- Depreciation Expense is not shown in the Cash Budget because it is a non-cash expense. True or False?Which of the following expenses would not appear in the cash budget? Depreciation expense Marketing expense Interest expense Wages expenseDepreciation is a non-cash charge, it doesn’t affect the results of cash budget analysis. True False
- Under the principle of cashflow estimation, why it is important that cashflow should be measured on after-tax basis?In construction of a capital budget, depreciation is used to compute cash flows. However, depreciation is not used to construct a cash budget. Explain the difference.In cash budgeting, what costs are paid (cash outflows) before they are recognized as expenses? What costs are paid (cash outflows) after they are recognized as expenses? What expenses are never paid (no cash outflow)? And what payments are never even recognized as expenses (cash outflows)?