A master budget . A. is the initial plan of what the company intends to accomplish in the period and evolves from both the operating and financing decisions B. improves companies' market capitalization and evolves from both the investing and financing decisions C. provides an ethical framework for decision making D. is a substitute for the management functions of planning and coordination

The correct answer is option D) A Master Budget is is a substitute for the management functions of planning and coordination.

Explanation:

A master budget is not the initial budget a company makes, It is the final budget that incorporates all other specific budgets such as financial budget, operational budget, production budget, marketing budget and ore.

It serves a central  planning tool that a management team uses to direct the activities of a company, set targets and execution strategy.

It also provides a framework to judge performance for respective departments.

A) is the initial plan of what the company intends to accomplish in the period and evolves from both the operating and financing decisions

Explanation:

A master budget is important because it helps upper management to revise business plans and strategies. By using a master budget, upper management can determine what needs to be done in order to implement the company's plans or strategies.

The master plan of a company is the aggregation of all the budgets elaborated by the company's departments, units or lower level functional areas. One of the most important part of a master budget is the expected or budgeted financial statements, cash flows and financing requirements.  

The master budget serves as a guide that if followed properly (there should always be a small room for corrections) should help the company achieve its goals.

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