A good capital budgeting program requires that a number of steps be taken in the decision making process. The first step is the explanation of data.

True

False

1 points

QUESTION 2

In most capital budgeting decisions the emphasis is on reported earnings rather than cash flows.

True

False

1 points

QUESTION 3

Even though one project may have superior cash flow, top management may sometimes choose a project that inflates earnings instead of cash flow.

True

False

1 points

QUESTION 4

The first administrative consideration in any capital budgeting process is collection of data.

True

False

1 points

QUESTION 5

Using the payback method can be appropriate when the time value of money is very low.

True

False