All of the Following Statements About Intangible Benefits in Capital

question 129

Multiple Choice

All of the following statements about intangible benefits in capital budgeting are correct except that they

• A) include increased quality and employee loyalty.
• B) are difficult to quantify.
• C) are often ignored in capital budgeting decisions.
• D) cannot be incorporated into the NPV calculation.

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Definitions:

Agency Problem

The possibility of conflicts of interest between the shareholders and management of a firm.

Leasing Benefits

Advantages obtained by renting assets, such as financial flexibility, lower upfront costs, and access to the latest technology.

Leasing

A financial arrangement wherein a person or company uses equipment, vehicles, or property for a specified period in exchange for regular payments to the owner.

Buying

The act of acquiring ownership or rights to a service or asset in exchange for money or value.