What is the ultimate goal of the capital budgeting process?
A)to determine how the consequences of making a particular decision affects the firm's revenues and costs
B)to list the projects and investments that a company plans to undertake in the future
C)to forecast the consequences of a list of future projects to the firm
D)to determine the effect of the decision to accept or reject a project on the firm's cash flows

Question

Quizplus · Accepted Answer

The ultimate goal of the capital budgeting process is to determine the effect of the decision to accept or reject a project on the firm's cash flows. This involves assessing the potential risks and rewards of a project and evaluating its financial viability in order to make an informed decision about whether or not to proceed. While options A-C may be part of the capital budgeting process, they are not the ultimate goal.

What Is the Ultimate Goal of the Capital Budgeting Process