Capital budgeting decisions are more complex when:

Question

Quizplus · Accepted Answer

All three of these factors can make capital budgeting decisions more complex.

A) When projects are mutually exclusive, it means that choosing one project means forgoing the benefits of the other. This makes it more difficult to compare the projects and determine which one will provide the greatest benefit.

B) If comparison projects are not of equal length, it can be more difficult to compare their costs and benefits. Adjustments may need to be made to account for differences in project length.

C) When capital is rationed, it means that there is a limit to the amount of funding available for investment in new projects. This can make it more difficult to choose among different projects, as trade-offs may need to be made between different opportunities.

Capital Budgeting Decisions Are More Complex When