Q104
In proper capital budgeting analysis we evaluate incremental
A.
accounting income
B.
cash flow
AnswerC.
earnings
D.
operating profit
Answer: Option B
Solution
Answer: Option B
Solution:
In proper capital budgeting analysis we evaluate incremental cash flow. Capital budgeting, and investment appraisal, is the planning process used to determine whether an organization's long term investments such as new machinery, replacement of machinery, new plants, new products, and research development projects are worth the funding of cash through the firm's capitalization structure.