Question : These decisions affect the growth,profitability and risk of business in the long run.
Option 1: Financing decisions
Option 2: Capital budgeting decisions
Option 3: Irreversible decisions
Option 4: None of the above
Correct Answer: Capital budgeting decisions
Solution : Capital budgeting decisions must be taken very carefully as the effect the growth, profitability and risk of business in the long run. It includes decisions relating to purchase of land building plant and machinery.
Hence, option B is correct.
Question : Which of the following statement is incorrect for capital budgeting decisions?
Option 1: The decisions have long term implications for the firm.
Option 2: These decisions involve large amount of funds.
Option 3: It involves less amount of risk.
Question : Which of the following is not the importance of capital budgeting decision?
Option 1: Long term growth and effects
Option 2: Irreversible decisions
Option 3: Facilitates financial control
Option 4: Large amount of funds available
Question : Which of the following statements is incorrect?
Option 1: Fixed capital affects the long term growth of the business.
Option 2: Fixed capital involves large amount of funds.
Option 3: There is no risk involved in fixed capital.
Question : What is the name of decisions taken to invest in fixed assets?
Option 1: Investment decision
Option 3: Both a and b
Question : The process of preparing a budget that covers multiple years is known as:
Option 1: Long-term budgeting
Option 2: Multi-year budgeting
Option 3: Biennial budgeting
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