Which of the following is the process of planning and managing a firm‟s long-term investments?
Correct answer: C. Capital Budgeting
- A. Capital Structuring
- B. Capital Rationing
- C. Capital Budgeting
- D. Working Capital Management
Explanation
Capital budgeting is the planning and evaluation of long-term investments such as machinery, expansion, and replacement projects. Capital rationing only concerns limiting the funds available for such investments.
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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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