Which of the Following Statements Is Correct Regarding Capital Investments

question 64

Multiple Choice

Which of the following statements is correct regarding capital investments?

• A)Capital investments should be funded out of excess cash reserves.
• B)Capital investments should have a positive internal rate of return.
• C)Capital investments should achieve short-term objectives.
• D)Capital investments should implement a company's strategy.

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Definitions:

Innovation Theory

A concept in economics that attributes economic growth and development primarily to the introduction of new technologies and improvements in processes or products.

Under Consumption

A situation where consumers are spending less than what is needed to drive economic growth due to various factors like low income or high savings.

Sunspot Theory

A theory in economics that suggests that economic cycles might be driven by psychological factors or extrinsic shocks, rather than fundamentals alone.

Psychological

Pertaining to the mind or mental processes, often emphasizing the influence on behavior, perception, and emotion.