Final answer:
Capital budgeting encompasses the generation, evaluation, and selection of investment projects, which aligns with option E) A, B, and C.
Step-by-step explanation:
Capital budgeting includes the generation of ideas, evaluation and ranking of alternatives, and selection and monitoring of investments. Therefore, the correct answer to the student's question is E) A, B, and C. Capital budgeting is a critical process in which firms make decisions about investments in projects that require spending money in the present with the expectation of future profits.
It may involve purchasing new machinery, building plants, or initiating research and development projects. These investments can be funded through various means such as early-stage investors, reinvesting profits, loans from banks or bonds, and selling stock. Each source of financial capital comes with its own considerations for how they will be repaid.