Capital budgeting decisions are based upon cost-benefit analysis. A project's net investment is compared to the project's net cash flows in order to make a decision.

Question

Quizplus · Accepted Answer

Capital budgeting decisions involve evaluating the costs and benefits of a project. This is typically done through comparing the initial investment with the expected cash flows from the project. Therefore, the statement is true.

Capital Budgeting Decisions Are Based Upon Cost-Benefit Analysis