Which of the Following Would Be Considered a Capital Budgeting

question 105

Multiple Choice

Which of the following would be considered a capital budgeting decision?

• A)Woolworths purchases inventory for resale to customers.
• B)Rio Tinto sells bonds and uses the proceeds to repurchase stock.
• C)Hancock Prospecting obtains short-term loans to finance day-to-day operations.
• D)Qantas purchases new aircraft to expand its routes.

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Definitions:

DSO

DSO (Days Sales Outstanding) is a financial metric that calculates the average number of days it takes for a company to collect payments after a sale has been made.

Aging Schedule

An accounting table that shows the breakdown of receivables by age, helping manage and collect debts.

Sales Fluctuate

Variations or changes in sales volume over a specified period due to factors such as market demand, seasonality, or economic conditions.

Inventory Management

The practice of ordering, storing, using, and selling a company's inventory, including the management of raw materials, components, and finished products.