CAF-7 · Chapter 11 · Question 1 of 15
A newly appointed CEO insists that all department heads must justify every single rupee of their proposed budget for the next year from scratch, rather than simply adding a percentage increase to last year's spending. Which budgeting approach is the CEO implementing?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Zero-based budgeting
Explanation
Zero-based budgeting (ZBB) requires managers to build their budgets from zero and justify every proposed expense, rather than using the previous year's budget as a starting base. It aims to eliminate historical inefficiencies.
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