Small Businesses Probably Make Less Use of the DCF Capital

question 25

True/False

Small businesses probably make less use of the DCF capital budgeting techniques than large businesses. This may reflect a lack of knowledge on the part of small firms' managers, but it may also reflect a rational conclusion that the costs of using DCF analysis outweigh the benefits of these methods for those firms.

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Definitions:

Planning Process

A systematic series of steps taken by organizations or individuals to achieve desired goals.

Road Map

A strategic plan that outlines the steps or milestones needed to achieve specific goals.

Planning Horizon

The future time period over which plans are made and predictions are considered for business decisions and strategies.

Plan's Maturity

The specified date at which the final payment for a financial instrument, such as a bond or loan, is due.