Capital Budgeting Quiz
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Questions and Answers

Which of the following best describes capital budgeting?

  • The process of determining if a company's long-term investments are worth funding (correct)
  • The process of allocating resources for daily operations
  • The process of planning short-term capital investments
  • The process of increasing the value of the firm to the shareholders

    • What types of investments are considered in capital budgeting?

  • Short-term capital expenditures
  • Research and development projects (correct)
  • Replacement of machinery
  • Daily operational expenses

    • Is capital budgeting typically considered a core business activity?

  • Yes, it is a core business activity for most firms
  • No, it is not part of the revenue model for most firms (correct)
  • No, it is only relevant for certain types of firms
  • Yes, it is part of daily operations for most firms

    • What is the underlying goal of capital budgeting?

    <p>To increase the value of the firm to the shareholders</p> Signup and view all the answers

    In which area of corporate finance does capital budgeting fall under?

    <p>Capital management</p> Signup and view all the answers

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