The main purpose of a budget is to a. Estimate the firm's beta coefficient. b. Forecast and control the expenditures for a certain activity. c. Determine cost of capital. d. Determine the optimal capital structure.

Which of the following is not a primary purpose of preparing a budget? a. To provide a basis for comparison of actual performance. b. To communicate the company's plans throughout the entire business organizations. c. To control income and expenditures in a given period. d. To make sure the company expand its operations.

The budgeting process should be one that motivates managers and employees to work toward organizational goals. Which one of the following is least likely to motivate managers? a. Setting budget targets at attainable levels. b. Participation by subordinates in the budgetary process. c. Use of management by exception d. Having top management set budget levels.