Pfizer's spending of $7.6 billion in 2006 on research and development of new drugs is a capital budgeting decision but not a financing decision.

Question

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Capital budgeting decisions involve deciding how to allocate financial resources for long-term investment projects, such as research and development of new products, while financing decisions involve determining how to raise capital to finance these projects, such as through debt or equity financing. Pfizer's spending on research and development is a capital budgeting decision, as it involves allocating funds for long-term investment, but it is not a financing decision.

Pfizer's Spending of $7