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Question

The size of assets, profitability, and competitiveness are all affected by _____.


A

Financing decision

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B

Capital budgeting decision

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C

Dividend decision

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D

Working capital decision

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Solution

The correct option is B

Capital budgeting decision


Answer (b) Capital budgeting decision

Explanation: Capital budgeting is utilised by organisations to assess significant activities and ventures, like new plants, equipment, and machinery. The process includes investigating and analysing a venture’s cash inflows and outflows to decide if the normal rate of return meets a set benchmark.


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