Process in which managers of company identify projects to add value is classified as__________?
Correct answer: A. Capital budgeting
- A. Capital budgeting
- B. Cost budgeting
- C. Book value budgeting
- D. Equity budgeting
Explanation
Capital budgeting involves evaluating and selecting long-term investment projects that can add value to the company. Cost, book value, and equity budgeting do not describe this project-selection process.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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