Which one of the following is a capital budgeting decision?
A)Deciding whether or not to open a new store
B)Determining how much inventory to keep on hand
C)Determining how much debt should be borrowed from a particular lender
D)Deciding if stock shares should be repurchased
E)Determining how much cash to keep on hand

Question

Quizplus · Accepted Answer

Capital budgeting decisions involve the allocation of financial resources for long-term investments that are expected to generate future cash flows, and opening a new store would be a typical example of such an investment. The other options listed are not capital budgeting decisions: determining inventory levels, deciding on debt financing, repurchasing stock, or managing cash are all related to short-term financial management or financing decisions, rather than long-term capital allocation.

Which One of the Following Is a Capital Budgeting Decision