Which of the Following Capital Expenditures May Not Appear in a Firm's

question 5

Multiple Choice

Which of the following capital expenditures may not appear in a firm's capital budget?
i.investment in a new factory; II) investment in a new machine; III) investment in training employees

• A)I only
• B)II only
• C)III only
• D)I and II only

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Definitions:

Absorption Costing

An accounting method that includes both variable and fixed production costs in the cost of goods sold.

Total Gross Margin

A financial metric that measures the difference between revenue and the cost of goods sold, indicating the profitability of sales before deducting operating expenses.

Variable Costing

A method of inventory costing that includes only variable manufacturing costs - direct materials, direct labor, and variable manufacturing overhead - in the cost of a product.

Net Operating Income

Income from a company's operations, calculated by subtracting operating expenses from operating revenue, excluding income and expenses from non-operating activities.