Asked by silvana cuadros salas on Jun 26, 2024
Verified
Capital budgeting decisions are generally based on:
A) Tentative predictions of future outcomes.
B) Perfect predictions of future outcomes.
C) Results from past outcomes only.
D) Results from current outcomes only.
E) Speculation of interest rates and economic performance only.
Capital Budgeting Decisions
The process of evaluating and selecting long-term investments that are in line with the firm's goal of maximizing shareholder value.
Future Outcomes
Possible events or results that have not yet occurred and may be influenced by current actions or decisions.
- Identify different capital budgeting evaluation methods and their applications.
Verified Answer
TB
Timothy BarkerJul 02, 2024
Final Answer :
A
Explanation :
Capital budgeting decisions involve analyzing potential investments and estimating future cash flows and expenses. Since future outcomes cannot be predicted with complete accuracy, decisions are based on tentative predictions and projections.
Learning Objectives
- Identify different capital budgeting evaluation methods and their applications.
Related questions
Which Methods of Evaluating a Capital Investment Project Use Cash ...
If Management Was Not Concerned with the Time Value of ...
Which Methods of Evaluating a Capital Investment Project Ignore the ...
Three Widely Used Methods of Comparing Investment Alternatives Are Payback ...
The Net Present Value Decision Rule Requires That When an ...