Answer :
Option C is correct. Capital Budgeting involves deciding among various long-term investment decisions.
Capital budgeting is the process of evaluating and selecting long-term investments that are expected to generate a return over an extended period. It is an important aspect of financial management that helps a business to determine which capital investment projects to undertake and how to allocate the available resources to maximize the return on investment.
The capital budgeting process typically involves the following steps:
1. Identification of investment opportunities: This step involves identifying potential investment projects that align with the company's strategic goals and objectives.
2. Evaluation of investment opportunities: This step involves evaluating the potential projects based on factors such as the expected return, the risk involved, and the cost of the investment.
3. Selection of investment opportunities: This step involves selecting the projects that have the highest potential return and the lowest risk.
4. Implementation of investment opportunities: This step involves putting the selected projects into action, which includes acquiring the necessary funding and resources, and managing the project to completion.
5. Review and evaluation: This step involves monitoring the performance of the investment over time and making any necessary adjustments to ensure that it is meeting the company's goals and objectives.
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Correct Question is -
Which of the following describes the word "capital budgeting" used while making investment decisions ?
a. It involves budgeting for yearly operational expenses.
b. It involves preparing the sales budget for the coming year.
c. It involves deciding among various long-term investment decisions.
d. It involves analyzing various alternatives of financing available to a company.
