With Respect to the Capital Budgeting Practices of Australian Companies

question 25

Multiple Choice

With respect to the capital budgeting practices of Australian companies,

• A)the profitability index remains the most popular option for large companies.
• B)NPV has been gaining in popularity.
• C)payback and discounted payback have been gaining in popularity.
• D)IRR and NPV have declined in popularity.

---

Definitions:

Materials

General term referring to the raw inputs or resources used in the production of goods and services, encompassing both direct and indirect materials.

Planning Budget

A financial plan that outlines the expected revenues, expenses, and goals of an organization for a specific period.

Other Expenses

Costs not directly related to the production of goods or services, such as interest payments or losses from asset sales.

Activity Variance

The difference between the budgeted amount of activity and the actual amount of activity, often analyzed in budgeting and costing practices.