Intangible benefits in capital budgeting

Question

Quizplus · Accepted Answer

Intangible benefits such as increased quality or employee loyalty can have a significant impact on a company's success and should be considered when making capital budgeting decisions. While they may be difficult to quantify or assign a specific rate of return, they can ultimately contribute to the overall profitability and success of the project or investment. Choices A and C are incorrect because intangible benefits should not be ignored or dismissed as irrelevant. Choice D is incorrect because intangible benefits do not necessarily have a rate of return in excess of the company's cost of capital.

Intangible Benefits in Capital Budgeting