Question

Fairfax Pizza borrowed 745,000 dollars to build a new restaurant for 745,000 dollars. The decision to spend 745,000 dollars on the restaurant is best classified as an example of what type of decision?

O Capital budgeting decision
O Financing decision
O stakeholder decision
O Agency decision

Answer 1

Financing decision

Step-by-step explanation:

Financing decision is concerned with borrowing and allocating funds for investments.

As such, the decision to borrowed 745,000 dollars and use the fund to build a new restaurant for 745,000 dollars is a financing decision.

Capital Budgeting decision-making process involves plans around any long term capital expenditures whose returns (cash inflows and outflow) are expected to be earned in more than a year.