The First Step in the Capital Budgeting Decision Process Model

question 108

Multiple Choice

The first step in the capital budgeting decision process model is to

• A)Establish assumptions common for each potential capital investment.
• B)Obtain appropriate sources of financing for investments.
• C)Identify potential capital investments that agree with the organization's strategy.
• D)Manage the control of non-quantitative factors.
• E)Analyze the present value of future cash inflow and outflow and relevant qualitative factors.

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Definitions:

Capitalist Economy

An economic system based on private ownership of the means of production and the creation of goods or services for profit.

Regulation

The establishment of rules by government or other authorities to control or govern conduct within a specific area.

Substantial

Of considerable importance, size, or worth; a term indicating something that is large enough in magnitude or number to merit attention.

Industrialization

The transformation from agrarian societies to industrial economies, characterized by the development of manufacturing, technological advancement, and urban growth.