A capital expenditure decision where the objective is to minimise the NPV of the costs to be incurred is known as the least-cost decision.

Question

Quizplus · Accepted Answer

The statement is true. In a least-cost decision, the aim is to minimize the total cost (including both initial investment and future operating costs) while achieving the necessary level of output or required operational capability. The evaluation is based on the NPV of these costs.

A Capital Expenditure Decision Where the Objective Is to Minimise