The best criterion for success in a capital budgeting decision would be to:

Question

Quizplus · Accepted Answer

Maximizing the value added to the firm should be the primary criterion for success in a capital budgeting decision. This means selecting projects that generate positive net present value (NPV) and increase the overall worth of the firm. Minimizing costs or financing all projects with debt may not necessarily lead to value creation for the firm, and maximizing the number of projects may dilute resources and result in low returns.

The Best Criterion for Success in a Capital Budgeting Decision