Decisions That Have Long-Term Perspectives of Two to Five Years

question 67

Multiple Choice

Decisions that have long-term perspectives of two to five years and affect the entire organization are

• A) operational decisions.
• B) strategic decisions.
• C) programmed decisions.
• D) tactical decisions.

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Definitions:

Initial Cost

The initial expense incurred to acquire an asset or start a project, excluding any subsequent costs.

Cash Flows

The sum of money flowing in and out of a company, particularly influencing its ability to cover short-term obligations.

Cost of Capital

The yield a business needs to generate from its project ventures to preserve its market valuation and draw in capital.

NPV

Net Present Value, a method used in capital budgeting to evaluate the profitability of an investment or project, by calculating the difference between the present value of cash inflows and outflows.