1. The basics of cupital budgeting One of the most important financial management activities that a firm undertakes is its evaluation and allocation of investment funds to support its future survical and growth. There activities may be motiveted by the desire to expand the firmis revenues, roduce its costs, or satisfy its mandatory or voluntary legel, healh, and salety requirements. They may have, more or less, multiyear effects on the organization and may or may not be considered as capital bodgeting activitien, Capital badgeting is the process of: Fhaniong and controling investmonts in asstes that are expected to require cash flows during that noxt year Phaning and controlling inceatments in asseta that are expeded to produco cash fows for more than coe year tha. To mabe the process more strearlined, firms identify whother the projocts qually as a capital buelecting project or not ond generally analyea: them in dillerant vertical categories. Which of the following are examples of a capital budgeting propioct? Chook al that apoly, Adanta Aerenaution Co's replecement of an exding piece of equipment. Fort Worth Cattie cais finenang of its monthly averape amount of acoounts receivable. Natural Gas Producen Corpit aoputition of a neve parced of real entate. For which of the folowiog rewone are capital butapting decelens important to a businese organization? Clock ofl chat andy. Capital budacting is the process off Planning and controlling investments in assets that are expected to require cash flows during the next year Planning and controling irivettments in assets that are expected to produce cash flows for more than one year The capital budgeting process in a company involves evaluabion of cash fows, risk analysis, correlation with the portfollo of profects in the company ote. To make this process more streamlined, firms identify whether the projeds qualify as a capital budgeting project or not and generally analyze them in different vatical categories. Which of the following are examples of a capital budgeting project? chock ay that apply. Athanta Aerosiautios Co.'s replacement of an existing pioce of equipment. Fort Worth Catbe Co.'s finanaing of its monthly avernge amount of acoounts receivable. Natural Gas Producers Corpls acquastion of a new parcel of real estate. For wlidi of the following reasons are copital budgeting dedsians importent to a business organization? Chock an the apply. Copital inveatments have mult,year life epana, so mistakes linger for a long time: Captal investments aro rethtively ineopensive. Copitel investments are diliaill to revere without incurring lareo additioncil eqpenseak: