Small businesses make less use of DCF capital budgeting techniques than large businesses. This may reflect a lack of knowledge on the part of small firms' managers, but it may also reflect a rational conclusion that the costs of using DCF analysis outweigh the benefits of these methods for small firms.

Question

Quizplus · Accepted Answer

Small businesses may not have the same resources or capacity as larger firms to implement DCF capital budgeting techniques. Additionally, the costs associated with acquiring expertise and technology to implement these techniques may outweigh the perceived benefits for small firms. However, it may also be true that small firm managers may lack knowledge of DCF analysis and its potential advantages.

Small Businesses Make Less Use of DCF Capital Budgeting Techniques