GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Project Selection
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Project Evaluation
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Project Generation
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All of the above
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Detailed explanation-1: -Arrange the following steps involved in capital budgeting in order of their occurrence:i) Project selectionii) Project appraisaliii) Project generationiv) Follow upv) Project execution.
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: -There are several capital budgeting analysis methods that can be used to determine the economic feasibility of a capital investment. They include the Payback Period, Discounted Payment Period, Net Present Value, Protability Index, Internal Rate of Return, and Modied Internal Rate of Return.
Detailed explanation-4: -Capital budgeting helps in making the most optimal decisions. It includes expansion programs, merger decisions, replacement decisions but will not comprise of the inventory related decision making.