When a Firm Chooses to Buy New Fixed Assets It

question 211

Multiple Choice

When a firm chooses to buy new fixed assets it is making a ______________ decision.

• A) capital budgeting
• B) capital structure
• C) financing
• D) working capital
• E) dividend policy

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Definitions:

Utility Bill

A monthly fee paid for services such as electricity, water, and gas consumption.

Economic Costs

The total cost of choosing one action over another, including both explicit costs (direct payments) and implicit costs (opportunity costs).

Accounting Costs

Explicit costs involving monetary payment or outlay by an organization or individual for goods or services.

Economic Profit

The difference between the total revenue generated by a business and the total costs, including both explicit and implicit costs.