In Theory, Capital Budgeting Decisions Should Depend Solely on Forecasted

question 4

True/False

In theory, capital budgeting decisions should depend solely on forecasted cash flows and the opportunity cost of capital.The decision criterion should not be affected by managers' tastes, choice of accounting method, or the profitability of other independent projects.

---

Definitions:

Nucleus

The central and most important part of an object, movement, or group, forming the basis for its activity and growth, or in cells, a membrane-bound organelle that contains the cell's chromosomes.

Cell Membrane

The semipermeable membrane surrounding the cytoplasm of a cell, responsible for controlling the passage of substances in and out of the cell.

Substances

Materials or items with distinct physical or chemical properties.

Cytoplasm

The gel-like substance within a cell, excluding the nucleus, that contains organelles and is the site of numerous metabolic reactions.