Which of the following is an objective of capital budgeting?

A) To eliminate all risk.
B) To discount all future and past cash flows.
C) To earn a satisfactory return on investment.
D) To reverse past decisions.
E) To reduce the number of investment activities.

Question

Jessica Machado · Accepted Answer

Final Answer : C, Explanation :  The objective of capital budgeting is to make investment decisions that will result in earning a satisfactory return on investment. It is not possible to eliminate all risk, discount all past cash flows, or reverse past decisions. Additionally, reducing the number of investment activities is not an objective but rather a potential outcome of effective capital budgeting.

Which of the following is an objective of capital budgeting?

A) To eliminate all risk.
B) To discount all future and past cash flows.
C) To earn a satisfactory return on investment.
D) To reverse past decisions.
E) To reduce the number of investment activities.

Definitions

Learning Objectives

Learning Objectives

Related questions

Which of the following is an objective of capital budgeting?A) To eliminate all risk.B) To discount all future and past cash flows.C) To earn a satisfactory return on investment.D) To reverse past decisions.E) To reduce the number of investment activities.

Definitions

Learning Objectives

Learning Objectives

Related questions

Which of the following is an objective of capital budgeting?

A) To eliminate all risk.
B) To discount all future and past cash flows.
C) To earn a satisfactory return on investment.
D) To reverse past decisions.
E) To reduce the number of investment activities.