GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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an investigation of the incomes produced by the venture
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cost of capital puts resources into business/ project
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Both A and B
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Neither A and B
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Detailed explanation-1: -Capital budgeting helps them create a budget for the project’s costs, estimate a timeline for its return on investment and decide whether the project’s potential value is worth its capital investment. Capital budgeting can be classified into two types: traditional and discounted cash flow.
Detailed explanation-2: -A manager must gather information to forecast cash flows for each project in order to determine its expected profitability. This is because the decision to accept or reject a capital investment is based on such an investment’s future expected cash flows.
Detailed explanation-3: -The most commonly used methods for capital budgeting are the payback period, the net present value and an evaluation of the internal rate of return.
Detailed explanation-4: -Answer: (B) Payback period. Explanation: A basic strategy for capital budgeting is the Payback Period.