1.There is only one method of evaluating capital budgeting decisions. True or fa

Question

1.There is only one method of evaluating capital budgeting decisions. True or false?

2.Capital budgeting decisions that relate to investments in technology are not as risky as other types of capital budgeting decisions. true or false?

3.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 reduce the number of investment activities.

E.To reverse past decisions.

4. Capital budgeting is the process of analyzing alternative long-term investments and deciding which assets to acquire or sell.True OR False

Explanation / Answer

1) False there are many methods of capital budgeting like incremental method , discounting method , etc

2) False capital budgeting decisions are long term investment decisions and the risk and return of the projects differs and we cannot say that the capital budgeting decisions related to technology will be less riskier

3) The objective of a capital budgeting decision is earn a satisfactory return on investment

4) True capital budgeting is the process of analysing alternative long term investments and deciding which assets to acquire and which assets to sell based on the return of the investment

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