Qno5

Indicate whether the following statements are true or false: 1. The process of making capital expenditure decisions is called capital budgeting. 2. Capital budgeting involves choosing among various capital projects to find the one(s) that will maximize a company's return on its financial investment. 3. At least once a month, proposals for projects are requested from each department. 4. The capital budget committee chooses the projects that they believe are the most worthy of funding. 5. Ultimately, the board of directors approve the capital expenditure budget. 6. For the purposes of capital budgeting, accrual accounting is the method used. 7. In capital budgeting, depreciation expense is added back to net income. 8. The availability of funds is an important consideration in capital budgeting. 9. Salvage value of equipment when the project is complete is considered irrelevant in capital budgeting. 10. The initial investment is an important consideration in capital budgeting