25.1.1 - What is Capital Budgeting?
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Practice Questions
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What is capital budgeting?
💡 Hint: Think about what kind of decisions it involves.
Why is risk management important in capital budgeting?
💡 Hint: Consider the consequences of a wrong investment decision.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the main purpose of capital budgeting?
💡 Hint: Think about the kind of decisions it helps organizations make.
True or False: Capital budgeting is primarily concerned with short-term cash flow.
💡 Hint: Consider the timeframe of the investments.
1 more question available
Challenge Problems
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You are a financial analyst for a tech startup considering two projects: upgrading servers or developing a new software application. List the factors you consider for capital budgeting.
💡 Hint: What long-term impacts might each choice have?
A company has to choose between two equally profitable ventures. One is a high-risk software project with rapid growth potential, and the other is a stable hardware upgrade with guaranteed clients. How do you evaluate which project to choose?
💡 Hint: Think about what the company's priorities are: growth or stability?
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