Question

Capital budgeting decisions are decisions relate to how a firm ______________. 1 manages working capital 2finances...

Capital budgeting decisions are decisions relate to how a firm ______________.

1 manages working capital

2finances its operations with debt and equity

3should make long-term investments

4should provide dividends to shareholders

Business   Accounting   
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Answer #1

Capital budgeting is the process a business undertakes to evaluate potential major projects or investments. Capital budgeting helps in evaluating the various investments options and helps in choosing the best from various alternatives.

Hence, Capital budgeting decisions are decisions relate to how a firm should make long-term investments.

All the other option relates to the the financing the business with various short term and long term financing options such as working capital, debt & equity. Option d also relates to the return to shareholders, therefore, are incorrect.

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