Question

"Capital budgeting is the process of analyzing alternative long-term investments and deciding which assets to acquire or sell." T/F

Answer 1

True

Step-by-step explanation:

Capital budgeting and investment appraisal is the planning process used by companies to determine whether long term investments, such as new plants or equipment, are worth the funding of cash through the firm's capitalization structure (debt, equity or retained earnings).

Using methods such as throughput, discounted cash flow, and payback analyses, the company analyses a project’s cash inflows and outflows to determine whether the expected return meets a set benchmark.