The purchase of new equipment is classiﬁed as a _____ decision.
A) Capital structure.
B) Capital budgeting.
C) Capital growth.
D) Working capital.
E) Capital return.

Question

Quizplus · Accepted Answer

The purchase of new equipment is a long-term investment decision that falls under capital budgeting. Capital budgeting involves making decisions about investing in long-term assets, such as machinery, equipment, and buildings, that will generate future cash flows for the company. Capital structure refers to how a company finances its operations, capital growth and capital return are not directly related to the decision of purchasing new equipment, and working capital refers to the funds a company uses to manage its daily operations.

The Purchase of New Equipment Is Classiﬁed as a _____