Capital budgeting decisions are risky because:

Question

Quizplus · Accepted Answer

All of the listed options make capital budgeting decisions risky. The uncertain outcomes mean there is no guarantee that the expected returns will be realized. Large amounts of money are also usually involved, making the potential losses significant. In addition, capital budgeting decisions often involve a long-term commitment, which is difficult to change. Making a wrong decision could result in significant financial losses that cannot be easily reversed. Therefore, all options listed make capital budgeting decisions risky.

Capital Budgeting Decisions Are Risky Because