The Importance of Capital Budgeting Decisions Is Due to All

question 81

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 looses 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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