Question

Capital budgeting decisions are risky because the outcome is uncertain, large amounts are usually involved, the...

Capital budgeting decisions are risky because the outcome is uncertain, large amounts are usually involved, the investment involves a long-term commitment, and the decision could be difficult or impossible to reverse.

True

False

Business   Accounting   
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Answer #1

Answer:

True

Explanation:

Capital Budgeting decisions refer to the decisions regarding addition, change, or removal of fixed assets.

Capital Budgeting decisions involve huge amounts and are generally impossible to reverse as they impact the organization in the long term.

For example: The decision by a company to acquire another company is a capital budgeting decision.

Therefore, the statement given in the question is true.

In case of any doubt or clarification, feel free to come back via comments.

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