Question

Capital budgeting analysis is based on

(A) the discounted cash flows incremental to a project.
(B) the additional income generated from the sales of a newly added project.
(C) the expected profits generated by a project's sales and costs.
(D) all incremental and allocated costs assigned to a project.
(E) all past and future expenditures related to a proposed project.

Answer 1

Answer:

(D) all incremental and allocated costs assigned to a project

Explanation:

The term capital budgeting in business maybe defined as the process of appropriating cash expenditures to long term investment opportunities, longer life spam than the operating period — usually a year. That is, capital budgeting, or capi­tal expenditure is the proposed capital as well as the source of revenue to financing the proposed investment opportunities.