Which of the following statements is incorrect regarding acceptance of a capital project?

Statement 1: Lower-level managers have discretion to make decisions that exceed a given capital budget.

Statement 2: The benefits from improved decision-making should exceed the costs of the capital budgeting efforts.

	Only Statement 1 is incorrect.
	Only Statement 2 is incorrect.
	Both statements are incorrect.

Regulatory projects are least likely to:

	affect an insurance company.
	generate profit.
	cause a company to cease operations due to the high costs involved.

Projects that involve new products and services will most likely:

	involve more people in the decision-making process as compared to those involved in regulatory projects.
	be among easier capital budgeting decisions.
	involve less uncertainty than expansion projects.