A good capital budgeting decision is one in which the benefits are worth more to the firm than the cost of the asset.

Question

Quizplus · Accepted Answer

A capital budgeting decision should involve analyzing the expected cash flows from the project and comparing them to the cost of the asset. If the present value of the cash inflows is greater than the initial investment, then the project is worth pursuing. This means that the benefits are worth more to the firm than the cost of the asset, making it a good decision.

A Good Capital Budgeting Decision Is One in Which the Benefits