Asked by Charlie Spaulding on Apr 24, 2024
Verified
Capital budgeting decisions involve decisions about:
A) emergency situations.
B) future cash inflows and cash outflows.
C) short-run planning situations.
D) cash inflows and outflows in current years.
Capital Budgeting Decisions
The process of making investment decisions in long-term assets and projects, based on their expected cash flows and potential for returns.
Cash Inflows
The total amount of money being received by a company from its various business activities, such as sales revenue, investments, and loans.
Cash Outflows
Cash outflows represent money leaving a business, covering expenses like payroll, rent, materials, and other operational costs, crucial for cash flow management.
- Comprehend the role of capital budgeting in strategic financial planning for the future.
Verified Answer
ZK
Zybrea KnightMay 02, 2024
Final Answer :
B
Explanation :
Capital budgeting decisions involve analyzing future cash inflows and cash outflows over a long term period in order to determine whether a potential investment is financially viable. It is not related to emergency situations or short-run planning situations, and while it may involve cash inflows and outflows in current years, it is focused on the long-term financial impact of an investment.
Learning Objectives
- Comprehend the role of capital budgeting in strategic financial planning for the future.