Asked by kirston seldon on Jul 04, 2024

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Which of the following would not be considered a good managerial tool in making a decision for determining a capital investment?

A) evaluating further assets that are dissimilar in nature or have different useful lives
B) using only quantitative measures to evaluate asset purchases
C) analyzing lease versus purchase option
D) considering income tax ramifications

Capital Investment

Funds spent by a company to purchase, maintain, or improve physical assets such as property, industrial buildings, or equipment.

Quantitative Measures

Metrics or data points that can be quantified numerically to assess performance, trends, or changes over time.

Asset Purchases

Transactions involving the acquisition of physical or intangible assets that are expected to generate economic benefits for the business.

  • Identify the managerial tools and considerations relevant to capital investment decisions.
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JG
Jaida GrahamJul 05, 2024
Final Answer :
B
Explanation :
Using only quantitative measures to evaluate asset purchases may not take into account qualitative factors such as market trends, competition, and potential risks, which can affect the success of a capital investment decision. It is important to consider both quantitative and qualitative factors in making such decisions. The other options listed are all important tools in determining a capital investment decision.