Capital budgeting decisions usually involve analysis of:
A)Cash outflows only.
B)Short-term investments only.
C)Long-term investments only.
D)Investments with certain outcomes only.
E)Operating revenues.

Question

Quizplus · Accepted Answer

Capital budgeting decisions generally involve long-term investments that have significant financial implications for the firm. Therefore, the analysis typically involves not only cash outflows but also potential future cash inflows, as well as factors such as risk, timing, and opportunity costs. Short-term investments and operating revenues are less likely to be part of the analysis. Investments with certain outcomes are rare in reality and often involve lower risk, so they may not require the same level of analysis as longer-term investments.

Capital Budgeting Decisions Usually Involve Analysis Of