Which of the following is true while making a capital investment decision?

Question

Quizplus · Accepted Answer

While making a capital investment decision, a manager should assess the risk of the project. This includes considering factors such as market conditions, competition, technology, and regulatory requirements. Ignoring the timing of the cash flows (choice B) can lead to poor investment decisions, as the timing of returns is important in determining the overall profitability of the project. Computing the competitor's return on investment (choice C) may provide useful information, but it should not be the sole basis for making a decision. Ensuring that the project cost is equal to the cash flow from investment (choice D) is not feasible since investments typically involve some degree of risk and uncertainty.

Which of the Following Is True While Making a Capital