Many firms use more than one technique to evaluate capital budgeting projects because multiple measures can provide decision makers with somewhat different pieces of relevant information.

Question

Quizplus · Accepted Answer

This statement is true. Different capital budgeting techniques can provide decision makers with different types of information, such as a project's profitability, risk, liquidity, and payback period. By using multiple measures, firms can get a more comprehensive picture of a project's potential value and make a more informed decision.

Many Firms Use More Than One Technique to Evaluate Capital