Lexi, Lauren and Madeleine wrapped up their discussion with a look at the steps

Question

   Lexi, Lauren and Madeleine wrapped up their discussion with a look at the steps involved with capital budgeting. “The steps are identifying opportunities, evaluating opportunities, implementing the project and conducting a post-audit,” said Lexi.   “No”, said Lauren, “you missed the pre-audit. Capital budgeting includes a pre-audit.” “Once more, you are both wrong,” said Madeleine. “What about pre-identification of post-audit opportunities?” Is Lexi right? Is Lauren right? Is Madeleine right? Are none of them correct? Support your answer with examples, as appropriate.

Explanation / Answer

In Capital budgeting there are basically five steps, namely Identifying and evaluating opportunities, estimating operating and implementation costs, estimate benefit, Assess Risk and Implement. So we can say that Lexi missed the estimate benefit step and assess risk step which was included by Lauren. Now, if we look at the steps defined by them we will observe that the basic 5 steps are covered where pre audit refers to estimating operating and implementation costs, estimate benefit and Assess Risk, Madeleine added that pre identification of post audit opportunities are missed and we can decipher that this is the sub part of the steps. So we can state that all of them are more or less right as they are talking about the same aspects with a different vie towards capital budgeting.

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.