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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.

 

Option 4: None of the above


Team Careers360 19th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: It involves less amount of risk.

 


Solution : Capital budgeting decisions involve huge funds. It affects the returns of the forms as a whole in the long term. So these decisions influence the overall business risk complexion of the firm.

Hence, option C is correct.

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