A characteristic of capital budgeting is

Question

Quizplus · Accepted Answer

The correct characteristic of capital budgeting is that the internal rate of return must be greater than the cost of capital. This means that the project is able to generate more return than the cost of funding the project, making it financially viable. While capital budgeting typically involves a large amount of money and a long-term time horizon, these are not defining characteristics of the process. Option B is incorrect because the IRR should be greater than the cost of capital, not less than it. Option D is also incorrect as the time horizon for capital budgeting may vary depending on the project itself.

A Characteristic of Capital Budgeting Is