Asked by Maryana Bilska on Jun 27, 2024
Verified
The capital budgeting process involves all of the following except:
A) Having department or plant managers submit new investment proposals.
B) Determining which financial institution to use for financing.
C) Evaluating the submitted proposals.
D) Forming a capital budget committee that includes accounting and finance members.
E) Approving or rejecting new investment proposals.
Capital Budgeting
The process of evaluating and selecting long-term investments that are in alignment with the company's goal of wealth maximization.
Financial Institution
An establishment that conducts financial transactions such as investments, loans, and deposits.
Capital Budget Committee
A capital budget committee is a group of individuals within an organization responsible for reviewing, approving, and overseeing large capital expenditures or investments.
- Discern the differences and applications of various capital budgeting processes and their components.
Verified Answer
BD
bhargav desaiJul 02, 2024
Final Answer :
B
Explanation :
The capital budgeting process involves steps such as submitting new investment proposals, evaluating them, forming a committee, and approving or rejecting them. However, determining which financial institution to use for financing is not a part of the capital budgeting process. This falls under the financing decision of the firm, which is separate from the capital budgeting decision.
Learning Objectives
- Discern the differences and applications of various capital budgeting processes and their components.