To explain: The important administrative consideration in capital budgeting.
Introduction:
Capital budgeting:
A process that helps a business evaluate the current worth of its potential projects and investment is termed as capital budgeting.
Answer to Problem 1DQ
The important administrative considerations in capital budgeting include:
Finding investment opportunities
Data collection for the evaluation of the investment
Evaluation of the investment
Re-evaluation of the previous decision of the investment
Explanation of Solution
Finding investment opportunities:
For capital budgeting, an investor must find opportunities for investing in a fund. In this, an investor must have at least two alternatives.
Data collection for the evaluation of the investment:
In this, the investor finds data related to the investment, such as initial investment,
Evaluation of the investment:
In this, the investor evaluates the investment to check whether it is profitable or not.
Re-evaluation of the previous decision of investment:
In this, before finalizing the decision, the investor re-evaluates the decision made earlier to check whether it is right or not.
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Chapter 12 Solutions
BUS 225 DAYONE LL
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