The Principle Objective of Capital Budgeting Is to

question 12

Multiple Choice

The principle objective of capital budgeting is to

• A)minimize the risks of the firm.
• B)maximize the value of the firm.
• C)maximize the assets of the firm.
• D)optimize the number of project requests.

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Definitions:

Inventory Purchases

The total cost associated with buying goods and materials kept in stock for the purpose of resale or production in a given period.

Administrative Expenses

Costs related to the general operation of a company, such as salaries of executive personnel, legal fees, and insurance.

Minimum Cash Balance

The least amount of cash that a company aims to hold in its accounts to meet immediate operational needs.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, excluding direct material and direct labor costs.