Errors in capital budgeting decisions
A) tend to average out over time.
B) decrease the firm's value.
C) are diminished because the time value of money makes future cash flows less important.
D) are easily reversed.

Question

Quizplus · Accepted Answer

Errors in capital budgeting decisions can have a significant impact on the firm's future cash flows and profitability, resulting in a decrease in the firm's value. These errors cannot be easily reversed and can have long-term consequences for the company. While the time value of money is important in capital budgeting, it does not diminish the impact of errors in decision-making.

Errors in Capital Budgeting Decisions