Intangible Benefits in Capital Budgeting

question 151

Multiple Choice

Intangible benefits in capital budgeting

• A) should be ignored because they are difficult to determine.
• B) include increased quality or employee loyalty.
• C) are not considered because they are usually not relevant to the decision.
• D) have a rate of return in excess of the company's cost of capital.

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Definitions:

Accounts Payable

Liabilities of a business that represent money owed to creditors for goods or services purchased on credit.

Operating Ratios

Financial metrics that assess a company's efficiency and performance by comparing various expenses or costs to its revenue.

Industry Averages

Statistical measures that represent the central tendency or typical values within a specific industry, often used for benchmarking financial or operational performance.

Expense Ratios

The measure of the cost of managing, operating, or investing in a fund, represented as a fraction of the fund's assets.