Answer:
True.
For an Internet start-up, capital budgeting and operating expenses are likely to be allocated to various aspects of the business, and equipment purchasing or leasing, inventory management (if applicable), and advertising expenses are common areas where these expenses are incurred.
Equipment Purchasing or Leasing: Internet start-ups may need to invest in computer servers, networking equipment, software licenses, and other technological infrastructure. These expenses are typically categorized as capital expenditures because they involve significant upfront costs and provide long-term benefits. Start-ups may choose to purchase equipment outright or lease it, depending on their financial circumstances.
Inventory (if applicable): If the start-up sells physical products, it may need to budget for inventory acquisition and management. Managing inventory levels efficiently is essential to ensure products are available when customers order them, but excessive inventory can tie up capital.
Advertising Expenses: Marketing and advertising are critical for Internet start-ups to attract customers and build brand awareness. Advertising expenses, including online advertising, content creation, and promotional campaigns, are considered part of the operating expenses of the business.
These expenses are an integral part of the financial planning and budgeting process for Internet start-ups and need to be carefully managed to ensure the efficient allocation of resources and sustainable growth.
Step-by-step explanation: