GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Planning of expenditure for assets
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Planning of Purchase
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Planning of Sales
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All of the above
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Detailed explanation-1: -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-2: -A capital expenditure budget is a formal plan that states the amounts and timing of fixed asset purchases by an organization. This budget is part of the annual budget used by a firm, which is intended to organize activities for the upcoming year.
Detailed explanation-3: -Capital Budgeting is the process of determining the firm’s long term investments if they are profitable or not. Capital Budgeting is a process of evaluating the proposed major projects or investments if these assets will be able to have the required rate of return for the company.