Which one of the following is a capital budgeting decision?
A)determining how many shares of stock to issue
B)deciding whether or not to purchase a new machine for the production line
C)deciding how to refinance a debt issue that is maturing
D)determining how much inventory to keep on hand
E)determining how much money should be kept in the checking account

Question

Quizplus · Accepted Answer

Capital budgeting decisions involve the planning and allocation of funds for long-term investments that are expected to generate returns over time, such as purchasing new equipment or expanding the business. Option B is the only choice that fits this definition. The other options relate to short-term financial management decisions, such as managing inventory levels or paying debt.

Which One of the Following Is a Capital Budgeting Decision