In making capital budgeting decisions,the principal focus is on:

Question

Quizplus · Accepted Answer

The principal focus in making capital budgeting decisions is on both cash flows and the timing of the cash flows. This is because capital budgeting decisions involve significant capital investments, and the goal is to evaluate the expected cash inflows and outflows of the investment over its expected life. By considering both the cash flows and their timing, decision-makers can assess the project's profitability, risk, and potential impact on the company's financial position. Accounting-based measures and nonfinancial performance indicators may be relevant to capital budgeting decisions, but they are not the principal focus.

In Making Capital Budgeting Decisions,the Principal Focus Is On