Capital budgeting is primarily concerned with

A. capital formation in the economy.

B. planning future financing needs.

C. evaluating investment alternatives.

D. minimizing the cost of capital.

Answer: C. Evaluating investment alternatives.

Capital budgeting refers to the process undertaken by a business venture or company in order to assess the profit making potential of alternative investment ventures.

It is a way for companies to measure, keep track of, and commit to only investments that yield the highest returns. Before any new venture, branch, investment, etc. is approved by the administration of any organization, it must have fulfilled the tenets of capital budgeting before it is approved. This is important because it creates room for measurability and accountability. It also helps the company avoid making unprofitable business investments.

Economics

3 years ago

283 Views

Math Calculus — AID—

Total time spent: 4 hours 15 minutes (it is equivalent to 255 minutes). Let the flight time from Paris to Glasgow be X. Then the flight time from Glasgow to Paris will be (X+10). We have an equation with one unknown variable: X + 45 + (X+10) = 255 ⇒ X = 100 So the […]

What were the typical crafts for Maya?

Mayans are well-known as great pottery makers. They did not use the pottery wheel. However,the tecnique they used was coiling consecutive rings of clay on top of each other and smoothing the surface by hand. Also, they were good when it came to working with stone – stone craving is another important craft of Maya. Many […]

What defines a free market?

The efficient working of a free market economy requires that the producer firms must have incentives to work hard and produce goods and services at the lowest possible cost per unit of output Market economies provide incentives to the firms and individuals by recognising and enforcing the property rights of the individuals and firms to […]

How does 3D printing work?

There are three different ways 3D printers work but they all rely on the printer converting a design into individual 2D slices which are then combined to make the final 3D object. The first method uses a pool of chemicals that turns solid when light, typically a UV laser, is shone on to it. The […]

Cigarette smoking causes emphysema.

Nearly everyone knows that smoking causes lung cancer, but did you know that smoking causes a number of other serious lung diseases? These include chronic bronchitis and emphysema, collectively known as chronic obstructive pulmonary disease (COPD). COPD is the fourth largest killer of Australians and smoking is the most important risk factor for COPD. When […]