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Question

The business risks complexion of the firm is determined by_______________.

A
Capital budgeting decisions
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B
Zero-base budgeting
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C
Sales forecast decisions
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D
Demand forecast decisions
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Solution

The correct option is A Capital budgeting decisions
Capital budgeting decisions refers to the financing and investment decision of a company where the managers take decision in rasing the capital for the company through equity and debt which is then invested in the business projects.
These decision involves business risks as the survival of the company depends upon the consequences of such decisions.

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