The management of fixed capital or investment or capital budgeting decisions are important because they are:
A. Short term decisions
B. Long term decisions
C. Reversible decisions
D. Irreversible decisions
Choose the correct answer from the options given below:
The management of fixed capital or investment or capital budgeting decisions are important because they are:
A. Short term decisions
B. Long term decisions
C. Reversible decisions
D. Irreversible decisions
Choose the correct answer from the options given below:
Solution
✅ Correct Option: 1
Capital budgeting (fixed capital) decisions are important because they are long-term decisions affecting the firm's growth and profitability for years, and they are largely irreversible, since disposing of acquired fixed assets causes heavy losses. Hence B and D only.
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