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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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