Consider the following statements about capital budgeting postaudits:
I. Postaudits can be used to detect desirable projects that were rejected.
II. Postaudits can be used to detect undesirable projects that were accepted.
III. Postaudits may reveal shortcomings in cash-flow projections, providing insights that allow a company to improve future predictions.
Which of the above statements is (are) correct?

Question

Quizplus · Accepted Answer

Postaudits are primarily used to evaluate the performance of accepted projects (II) and to improve future cash-flow projections by learning from past mistakes (III). They are not typically used to identify rejected projects that should have been accepted.

Consider the Following Statements About Capital Budgeting Postaudits