Question

Which of the following would not involve a capital-budgeting analysis?

A. The acquisition of new equipment.
B. The adoption of a new cost driver for overhead application.
C. The construction of a new distribution facility.
D. All of the above would involve a capital-budgeting analysis.
E. None of the above would involve a capital-budgeting analysis.

Answer 1

The correct answer is B. The adoption of a new cost driver for overhead application.

Step-by-step explanation:

This option is chosen because it is not directly related to organizational capital, or the production of goods or the provision of services. Otherwise it happens with options A and C, which does merit an analysis of the capital budget.

Option B is only taken into account in the analysis of the sales budget or production costs.