Which of the following is a typical capital budgeting decision?
A) Purchase of office supplies
B) Granting credit to a new customer
C) Replacement of manufacturing equipment with more modern and efficient equipment
D) Financing the firm with more long-term debt and less equity

Question

Quizplus · Accepted Answer

Capital budgeting decisions typically involve large, long-term investments that directly impact the company's ability to generate revenue in the future. The replacement of manufacturing equipment with more modern and efficient equipment is an example of a typical capital budgeting decision.  Options A and B are operational decisions and option D is a financing decision.

Which of the Following Is a Typical Capital Budgeting Decision