COST ACCOUNTING
CAPITAL BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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analyzing alternate projects
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evaluating the net present value (NPV) of each projectʹs cash flows
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compiling a list of potential projects
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forecasting the future consequences for the firm of each potential project
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Detailed explanation-1: -It starts with the identification of different investment opportunities. Then, after collecting and evaluating various investment proposals and selecting the best profitable investment, the decision for capital budgeting and apportionment is to be taken.
Detailed explanation-2: -The first step of a capital budgeting process is the identification of an investment option. The business considering capital budgeting must find the reason for investment in this step. The identification may result in a number of ways, such as new product launches or expansion of the current business opportunities.
Detailed explanation-3: -Capital Budgeting is the process of making financial decisions regarding investing in long-term assets for a business.