Which One of the Following Would Be Considered a Capital

question 59

Multiple Choice

Which one of the following would be considered a capital budgeting decision?

• A) Planning to issue common stock rather than issuing preferred stock
• B) Deciding to expand into a new line of products, at a cost of $5 million
• C) Repurchasing shares of common stock
• D) Issuing debt in the form of long-term bonds

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Definitions:

Lacked Capacity

Refers to a situation where an individual does not have the legal ability to enter into a binding contract, often due to age, mental condition, or intoxication.

Mental Impairment

A condition that significantly affects one's cognitive functions, potentially impacting daily living and activities.

Ratify

To formally approve or confirm, often referring to the approval of agreements, treaties, or constitutional amendments.

Mental Impairment

A condition affecting one's cognitive abilities and daily functioning, possibly due to illness or injury.