Which of the Following Is Not Considered a Capital Budgeting

question 94

Multiple Choice

Which of the following is not considered a capital budgeting project?

• A)Purchase of a new packaging machine
• B)Purchase of land on which to build a new factory
• C)Purchase of a new delivery truck to replace an old truck
• D)Purchase of inventory to be sold in the future

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Definitions:

Sum-Of-The-Years-Digits

A depreciation method that results in a more accelerated write-off of the asset, calculated by adding together the digits of the asset's useful life years.

MACRS Tables

The Modified Accelerated Cost Recovery System tables used in the United States for tax purposes to determine the depreciation of assets over time.

Allowable Depreciation

The allowable tax deduction for the reduction in value of a tangible asset over its useful life, as determined by tax regulations.

MACRS Tables

Depreciation schedules in the Modified Accelerated Cost Recovery System allowing for faster asset depreciation in the earlier years of the asset's life.