How Should Financial Budgets Be Thought Of

question 34

Multiple Choice

How should financial budgets be thought of?

• A) As a tool for limiting expenditures
• B) As a method for obtaining the most productive and profitable use of an organization's resources
• C) As a method for rationing the profits from the past year
• D) As a method for determining who should receive the largest pay raise
• E) As a tool for forecasting future profits

Evaluate equipment investment decisions using different capital budgeting techniques.

Understand the basic principles of capital budgeting and investment evaluation techniques.

Calculate and interpret the payback period for investment projects.

Understand and apply the concept of net present value (NPV) in investment decisions.