BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Long term and short term assets
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Fixed assets
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Long term assets
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Short term assets
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Detailed explanation-1: -Capital Budgeting is the process of making financial decisions regarding investing in long-term assets for a business. It involves conducting a thorough evaluation of risks and returns before approving or rejecting a prospective investment decision. This process is also known as investment appraisal.
Detailed explanation-2: -Capital budgeting is used by companies to evaluate major projects and investments, such as new plants or equipment. The process involves analyzing a project’s cash inflows and outflows to determine whether the expected return meets a set benchmark.
Detailed explanation-3: -The investment of funds into capital or productive assets, which is what capital budgeting entails, meets all three of the above criteria and therefore is considered a long-term decision.
Detailed explanation-4: -Capital Budgeting is a part of: Investment Decision.
Detailed explanation-5: -Capital budgeting is the process of determining which long-term capital investments a company will make in order to profit in the long-term. Capital budgeting requires detailed financial analysis, including estimating the rate of return for a capital project.