Capital budgeting is a procedure that:
A)adjusts the deficit for inflation.
B)estimates what the deficit would be if the economy were operating at the natural level of output.
C)accounts for assets as well as liabilities.
D)measures the impact of fiscal policy on the lifetime incomes of individuals of different ages.
Multiple Choice

Question

Quizplus · Accepted Answer

Capital budgeting is a process of evaluating and selecting long-term investments that are expected to generate cash flows in the future. Therefore, it is focused on measuring the impact of capital expenditures on assets and liabilities of the organization. Options A, B, and D are not related to the definition or purpose of capital budgeting.

Capital Budgeting Is a Procedure That