Which of the following is an objective of capital budgeting
What is the objective of capital budgeting?
Selecting the most profitable investment is the main objective of capital budgeting. However, controlling capital costs is also an important objective. Forecasting capital expenditure requirements and budgeting for it, and ensuring no investment opportunities are lost is the crux of budgeting.
Which of the following is an objective of capital budgeting quizlet?
What is the objective of capital budgeting? The objective of capital budgeting decisions is to select investments in real assets that will increase the value of the company. It is said that the corporate objective is to maximise shareholders’ wealth, that is maximise firm value.
Which is one of the objective of capital budgeting Mcq?
Capital budgeting decisions affect the future stability of the firm. Business expansion decision in a capital expenditure decisions. Sunk cost is a relevant cost in capital budgeting.
Which method of evaluating a capital investment project ignores the time value of money?
Payback
Payback ignores the time value of money. Payback ignores cash flows beyond the payback period, thereby ignoring the ” profitability ” of a project.
What is the principal objective of a cash budget quizlet?
Disbursements for these operating expenses, that is, the cash payments for them, may come in a previous period or a future period, as well as during the period. What is the principal objective of a cash budget? To regulate the flow of cash in optimum fashion.
Which of the following is a source of capital for entrepreneurs?
Some of the top ways to raise capital are through angel investors, venture capitalists, government grants, and small business loans. There are other methods for financing such as credit cards or invoice financing, but these should be used only if you need cash quickly and know the risks involved.
Which method of capital budgeting considers time value of money?
The correct option is (b) Net present value.
Net present value is the method that considers the time value of money for evaluating alternative…
Which method of capital budgeting does not consider time value of money?
the payback method is one of the techniques used in capital budgeting that does not consider the time value of money. the payback method simply computes the number of years it will take for an investment to return cash equal to the amount invested.
What are the methods of capital budgeting?
5 Methods for Capital Budgeting
- Internal Rate of Return. …
- Net Present Value. …
- Profitability Index. …
- Accounting Rate of Return. …
- Payback Period.
What is capital budgeting explain the techniques of capital budgeting?
Capital budgeting techniques are the methods to evaluate an investment proposal in order to help the company decide upon the desirability of such a proposal. These techniques are categorized into two heads : traditional methods and discounted cash flow methods.
Which of the following method is not used in capital budgeting?
| Q. | Which of the following is not used in Capital Budgeting? |
|---|---|
| B. | Sensitivity Analysis |
| C. | Net Assets Method |
| D. | Cash Flows. |
| Answer» c. Net Assets Method | |
Which of the following is not a capital budgeting decision?
In capital budgeting, the term Capital Rationing implies: “Capital budgeting is long term planning for making and financing proposed capital outlays”.
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| Q. | Which of the following is not a capital budgeting decision? |
|---|---|
| A. | Expansion Programme |
| B. | Merger |
| C. | Replacement of an Asset |
| D. | Inventory Level |
Which method in a capital budgeting is based on the discounted cash flow?
In capital budgeting, a technique which is based upon discounted cash flow is classified as net present value method. Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.
Which one of the following is a capital budgeting decision?
The correct answer is b. deciding whether or not to open a new store.
Which of the following would be the best example of a capital budgeting decision?
Capital budgeting decisions are a part of the overall financial management process for a firm. Decisions like constructing a new factory, purchasing heavy machinery for production or making a significant investment in an outside business entity are examples of Capital Budgeting.
Which of the following is true of capital budgeting decisions?
Which of the following is true of capital budgeting decisions? They create value for a firm when the value of the selected productive assets is worth more than their cost. … The capital budgeting process starts with a firm’s: strategic plan.
Which one of the following is capital structure decision?
Determining how much debt should be assumed to fund a project is a capital structure decision.
Which of the following is a capital budgeting decision that is not cash flow based?
Which of the following is a capital budgeting decision that is not cash flow based? explanation: The accounting rate of return use net operating income not cash flow.