GlaxoSmithKline's spending of $6 billion in 2012 on research and development of new drugs is a capital budgeting decision but not a financing decision.

Question

Quizplus · Accepted Answer

Capital budgeting decisions refer to investment decisions made by a company to allocate its resources towards long-term projects or investments, such as research and development of new drugs. Financing decisions refer to how a company raises capital to fund these projects or investments. Since GlaxoSmithKline's spending on research and development is a decision regarding the allocation of resources towards a long-term project, it is a capital budgeting decision but not a financing decision.

GlaxoSmithKline's Spending of $6 Billion in 2012 on Research and Development