Capital budgeting is best described by which of the following?
A) It analyzes production costs.
B) It helps select new products.
C) It selects asset proposals for maximum profitability.
D) It combines all budgets into a master budget.

Question

Quizplus · Accepted Answer

Capital budgeting involves the evaluation and selection of long-term investment proposals, such as the acquisition of new equipment or the expansion of a product line, based on their potential profitability and return on investment. It is focused on selecting the best assets or projects for investment, rather than analyzing production costs or combining all budgets into a master budget.

Capital Budgeting Is Best Described by Which of the Following