QUESTION 1

Which one of the following statements is related to capital budgeting?

a.

A firm should consider the size, risk, and timing of an asset's cash flows before deciding to purchase that asset.

b.

A firm should consider various types of loans offered by various lenders before taking out a loan.

c.

A firm should determine the ideal level of inventory that should be kept on hand.

d.

A firm should monitor the amount of its current assets as compared to its current liabilities.

e.

A firm should monitor the ratio of debt to equity financing which it uses.