Which one of the followings is not true about capital budgeting? It involves ide
ID: 2633474 • Letter: W
Question
Which one of the followings is not true about capital budgeting?
It involves identifying projects that will add to the firm's value.
It involves large capital investments.
Capital budgeting decisions can be easily reversed at any time.
It allows the firm's management to analyze potential business opportunities and decide on which ones to undertake.
It involves identifying projects that will add to the firm's value.
It involves large capital investments.
Capital budgeting decisions can be easily reversed at any time.
It allows the firm's management to analyze potential business opportunities and decide on which ones to undertake.
Explanation / Answer
The following statement is not true-
Capital budgeting decisions can be easily reversed at any time.
The reason being the fact that large amount of capital investment is required. This involves purchase land, plant and machinery and other assets. It involves long term commitments. Hence the decisions are not reversible.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.