The output of the capital budgeting decision models is only as good as the inputs that go into them.

Question

Quizplus · Accepted Answer

The accuracy and reliability of the output of the capital budgeting decision models depend on the quality of the inputs used in the model. The inputs may include estimates of project cash flows, discount rates, initial investment costs, and other relevant information. If the inputs are inaccurate or unreliable, the output of the model will also be inaccurate, which could lead to poor investment decisions. Therefore, it is important for managers to ensure that the inputs are as accurate and reliable as possible to ensure effective decision-making.

The Output of the Capital Budgeting Decision Models Is Only