The Importance of Capital Budgeting Decisions Is Due to All

question 101

Multiple Choice

The importance of capital budgeting decisions is due to all of the following factors except for:

• A) the impact of a capital budgeting decision is long term;the firm loses some decision-making flexibility when capital projects are purchased.
• B) effective capital budgeting can improve the timing of asset acquisition and the quality of assets purchased.
• C) the acquisition of fixed assets typically involves substantial expenditures,and before a firm spends a large amount of money,it must have the funds available.
• D) capital budgeting techniques overcome the problems with error in forecasts for asset requirements and projected sales,we will still be able to determine if we should fund the project.
• E) all of the above are factors that make capital budgeting important.

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Definitions:

Marginal Product

It refers to the increase in output that arises from an additional unit of input, highlighting the incremental gains in production.

Marginal Profit

Marginal profit is the increase in profit that results from selling an additional unit of a product or service.

Marginal Product

The additional output resulting from one more unit of a particular input, showing the contribution of that input to total production.

Marginal Product

The additional output resultant from increasing one unit of a specific input, holding all other inputs constant.