Final answer:
The answer is (a) True. Reliable estimates are essential in capital budgeting to ensure that cost and return projections are accurate and to maintain investor and stakeholder confidence.
Step-by-step explanation:
The reliability of estimates is indeed a critical factor in capital budget proposals. A reliable estimate ensures that the projected capital costs and returns are close to what will actually occur, reducing the risk of project underperformance or financial loss. Therefore, the answer to the student's question is: (a) True.
Having reliable estimates allows for better planning and management of resources, and also improves the confidence of investors and stakeholders in the project. The process of capital budgeting involves evaluating the potential expenses and revenue of a project over time to determine if it will provide sufficient return on investment.