Which one of the following is a capital budgeting decision?
A) Ascertaining the optimal level of inventory.
B) Determining which bank has the best loan terms.
C) Evaluating the minimal amount of cash which the firm should keep on hand.
D) Deciding whether or not the firm should open another retail outlet.
E) Establishing the length of time for which store credit will be offered.

Question

Quizplus · Accepted Answer

Capital budgeting decisions involve evaluating substantial investments in projects or assets that will impact the firm's operations over the long term. Opening another retail outlet is an example of a capital budgeting decision because it involves a significant investment and will affect the company's future operations and profitability.

Which One of the Following Is a Capital Budgeting Decision