Statement I: Capital budgeting seldom requires large investments of funds. Statement II: Planning and control of...
Statement I:
Capital budgeting seldom requires large investments of funds.
Statement II:
Planning and control of capital expenditures is necessary under capital budgeting.
Homework Answers
1. The principle feature of capital budgeting is that it involves huge cash investments. For this reason we prepare budgets and hold meetings to decide in investing or not. Thus it's not seldom, but always heavy Investment. Hence this Statement is incorrect.
2. Since capes budgeting involves careful planning of capital outlay, unnecessary expense outruns have to be efficiently minimised eliminated. That's the purpose of capital budgeting as well. Hence planning as well as controlling capital expenditure is an objective of the capital budgeting. Hence this Statement is correct.
Add Answer to:
Statement I:
Capital budgeting seldom requires large investments of
funds.
Statement II:
Planning and control of...
Which of the following is FALSE concerning capital budgeting decisions? A. Capital investments per input are...
Which of the following is FALSE concerning capital budgeting decisions? A. Capital investments per input are more expensive than operating expenditures B. Managers are equally knowledgeable of operating expenditures and capital expenditures due to the frequency each type of decision is made C. Altering capital investments requires more time than operating expenditures D. All of the above
Planning and Control- Budgeting Management and cost accounting requires the accumulation of costs for a number...
Planning and Control- Budgeting Management and cost accounting requires the accumulation of costs for a number of different purposes, i.e. stock valuation and profit measurement, decision making and planning and control. The budgeting process has been traditionally used to plan an organisations’ activities into the future. A budget can be described as an approved financial plan, reflecting expectations for a defined, future period of time. Budgets also serve an as important framework for performance evaluation and control by holding individuals...
Surveys show budgeting is regarded as one of the most important management tools by Asian companies. Required: (i) Discuss five (5) advantages of budgeting in planning and control. (ii) Identify three...
Surveys show budgeting is regarded as one of the most important management tools by Asian companies. Required: (i) Discuss five (5) advantages of budgeting in planning and control. (ii) Identify three (3) guidelines that an organization needs to follow if budgeting is to be an effective motivational tool for employees. (16 marks)
CCM corp. uses the payback period method of capital budgeting. It requires all new investments to...
CCM corp. uses the payback period method of capital budgeting. It requires all new investments to have a three-year payback period. The end of year incremental free cash flows for a new investment opportunity are given below. Assuming the free-cash-flows will be received uniformly throughout the year. What is the payback period of this investment? Round your answer to two decimals. Timeline Free-cash-flow -1000 500 1000 1000 1000
CCM corp. uses the payback period method of capital budgeting. It requires all new investments to...
CCM corp. uses the payback period method of capital budgeting. It requires all new investments to have a three-year payback period. The end of year incremental free cash flows for a new investment opportunity are given below. Assuming the free-cash-flows will be received uniformly throughout the year. What is the payback period of this investment? Round your answer to two decimals. Timeline 0 1 2 3 Free-cash-flow -1000 500 1000 1000
what are the capital budgeting steps if I am planning to relocate my plant business to...
what are the capital budgeting steps if I am planning to relocate my plant business to a bigger location. please note I will be paying rent in this new location. Please draft up hypothetical figures also?
9. The City of Henderson reported a change in fund balances of $2,20 governmental funds Statement...
9. The City of Henderson reported a change in fund balances of $2,20 governmental funds Statement of Revenues, Expenditures ted a change in fund balances of $2,267,000 in its Balances for the year ended December 31, 2017. In a of Revenues, Expenditures, and Changes in Fund information is relevant: the year ended December 31, 2017. In addition, the following A. Capital outlay expenditures amounted to $8,755,000 statement. General government capital assets amoun enditures amounted to $8,755,000 in the modified accrual...
This week we are studying Project Cash Flows and Capital Budgeting and I am stuck on...
This week we are studying Project Cash Flows and Capital Budgeting and I am stuck on the below and would like some help. The Federal Reserve lowers interest rates in the economy to increase economic activity. Using the capital budget decision tools, discuss how decreasing interest rates can cause firms to make more investments. How is the pro forma statement we used in this chapter for computing OCF different from an accountant’s income statement? Why does a decrease in NWC...
Capital Budgeting is the financial planning component of business. Companies analyze various business alternatives to discover...
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Capital Budgeting Case This case is about the purchase of long-term operational assets which called capital investments. Investment in capital assets normally can be covered only by using those a...
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CCM corp. uses the payback period method of capital budgeting. It requires all new investments to have a three-year payback period. The end of year incremental free cash flows for a new investment opportunity are given below. Assuming the free-cash-flows will be received uniformly throughout the year. What is the payback period of this investment? Round your answer to two decimals. Timeline Free-cash-flow -1000 500 1000 1000 1000
9. The City of Henderson reported a change in fund balances of $2,20 governmental funds Statement of Revenues, Expenditures ted a change in fund balances of $2,267,000 in its Balances for the year ended December 31, 2017. In a of Revenues, Expenditures, and Changes in Fund information is relevant: the year ended December 31, 2017. In addition, the following A. Capital outlay expenditures amounted to $8,755,000 statement. General government capital assets amoun enditures amounted to $8,755,000 in the modified accrual...
Capital Budgeting Case This case is about the purchase of long-term operational assets which called capital investments. Investment in capital assets normally can be covered only by using those assets Once a company purchases a capital asset, it is committed to that investment for an extended period of time. Business profitability ultimately hinges, to a large extent, on the quality of a few key capital investment decisions. A capital investment decision is essentially a decision to exchange current cash outflows...
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