Set of projects or set of investments usually maximize firm value is classified as_________?
Correct answer: A. Optimal capital budget
- A. Optimal capital budget
- B. Minimum capital budget
- C. Maximum capital budget
- D. Greater capital budget
Explanation
An optimal capital budget is the combination of projects that best uses available investment funds and maximizes the firm’s value. “Maximum capital budget” refers only to size and does not necessarily identify the best projects.
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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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