Capital Budgeting and Investment Decisions
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Questions and Answers

What is a key aspect of capital budgeting?

  • Short-term financial planning
  • Long-term investment in human resources
  • Allocation of capital in permanent assets (correct)
  • Day-to-day management of cash flow
  • What is the primary goal of maintaining a balance between fixed and current assets?

  • To maximize profitability and maintain liquidity (correct)
  • To increase market value
  • To reduce costs
  • To minimize risk
  • What makes capital budgeting a difficult decision?

  • The uncertainty of estimating costs and benefits (correct)
  • The lack of data available
  • The complexity of financial models
  • The ease of estimating costs and benefits
  • What is a secondary aspect of capital budgeting?

    <p>Decisions with respect to replacement and renovation of old assets</p> Signup and view all the answers

    What is the impact of capital budgeting on a firm's success?

    <p>It has a significant impact on long-term success and growth</p> Signup and view all the answers

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