BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which one is not a factor affecting capital budgeting decision
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Rate of return
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Cash flow of the project
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Investment criteria
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Flotation cost
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Explanation:
Detailed explanation-1: -The correct option is ii. inventory level.
Detailed explanation-2: -These are: funds involve, rate of interest, rate of return, cash flow, etc. All these factors influence the decision to go for a particular investment or not. For the same purpose, capital budgeting techniques are applied and accordingly decisions are taken.
Detailed explanation-3: -Diversification is not a factor determining the capital structure.
Detailed explanation-4: -Accrual principle is not followed in capital budgeting.
There is 1 question to complete.