Practice Factors Affecting Capital Budgeting Decisions - 25.7 | 25. Capital Budgeting Techniques | Management 1 (Organizational Behaviour/Finance & Accounting)
K12 Students

Academics

AI-Powered learning for Grades 8–12, aligned with major Indian and international curricula.

Professionals

Professional Courses

Industry-relevant training in Business, Technology, and Design to help professionals and graduates upskill for real-world careers.

Games

Interactive Games

Fun, engaging games to boost memory, math fluency, typing speed, and English skills—perfect for learners of all ages.

Typing
Memory
Math
English Adventures
Knowledge

25.7 - Factors Affecting Capital Budgeting Decisions

Enroll to start learning

You’ve not yet enrolled in this course. Please enroll for free to listen to audio lessons, classroom podcasts and take practice test.

Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is the cost of capital?

💡 Hint: Think about what companies need to earn on their investments.

Question 2

Easy

Why is understanding risk important in capital budgeting?

💡 Hint: Consider the consequences of poor investment decisions.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What does the cost of capital represent in capital budgeting?

  • The profit from investments
  • The amount of legal compliance required
  • The required return on investments

💡 Hint: Focus on the concept of 'return' in capital budgeting.

Question 2

True or False: Higher expected returns automatically make a project more attractive.

  • True
  • False

💡 Hint: Consider what increases project risk means for investments.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A firm decides to invest in a new technology project without conducting risk analysis or considering the expected return. Describe possible consequences.

💡 Hint: Reflect on what neglecting risk might mean for financial health.

Question 2

Consider a project with a high expected return but also a significant legal hurdle. Analyze the decision-making process for capital budgeting.

💡 Hint: Think about how legality and risk inform each other in investment decisions.

Challenge and get performance evaluation