Which of the Following Is NOT True About Capital Budgeting

question 73

Multiple Choice

Which of the following is NOT true about capital budgeting.

• A) It involves identifying projects that will add to the firm's value.
• B) It involves large capital investments.
• C) The large capital investments can be reversed at any time.
• D) It allows the firm's management to analyze potential business opportunities and decide on which ones to undertake.

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Definitions:

Preemptive Merger

A strategic merger aimed at preventing potential competition by acquiring or merging with a competitor before they become a larger threat.

Justice Department

A government department responsible for the enforcement of the law and administration of justice.

Staggered Board

A corporate board of directors structure where members are divided into classes serving different term lengths, making it difficult for a complete board takeover in any single election.

Poison Pills

A defensive strategy used by companies to deter hostile takeovers by making the company less attractive to potential acquirers.