ECONOMICS

Detailed explanation-1: -The capital budgeting process is also known as investment appraisal.

Detailed explanation-2: -Capital budgeting involves identifying the cash in ows and cash out ows rather than accounting revenues and expenses owing from the investment. For example, non-expense items like debt principal payments are included in capital budgeting because they are cash ow transactions.

Detailed explanation-3: -The correct option is ii. inventory level.

Detailed explanation-4: -Capital budgeting decisions also give an indication regarding what direction the company plans to move in the years ahead. Capital expenditure budgets are commonly constructed to cover periods of five to 10 years and can serve as major indicators regarding a company’s “five-year plan” or long-term goals.