Concept explainers
a)
To discuss: The way capital budgeting procedures can be used by personnel managers.
a)
Explanation of Solution
It helps the personnel manager to value the pension plans and insurance programs with the help of discounted cash flow techniques.
b)
To discuss: The way capital budgeting procedures can be used by research and development staffs.
b)
Explanation of Solution
It helps the research and development staffs to invest and evaluate the new product research and improvement research with the help of methodology of capital budgeting.
c)
To discuss: The way capital budgeting procedures can be used by research and development staffs.
c)
Explanation of Solution
Generally, advertisement campaigns benefit the company by way of increasing sales. Thus, these investments can be determined with the help of methodology of capital budgeting.
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Chapter 9 Solutions
Contemporary Financial Management
- Explain how a budgeted income statement for a service business may be used for both planning and control purposes.arrow_forwardCapital budgeting techniques comes under which function of financial manager a.Tax Management b.Investment Decision c.Liquidity Management d.Acquiring necessary capitalarrow_forwardDescribe one of the primary functions of engineers: Making capital-budgeting?arrow_forward
- Explain why it would be wise for a financial manager to learn advanced capital budgeting techniquesarrow_forwardWhat is the second step of capital budgeting? a. Gathering the money for the investment b. Identifying potential projects c. Getting the accountant involved d. All of the abovearrow_forwardDiscuss the concept of working capital management and its significance in financial decision making.arrow_forward
- Which of the following scenario shows the financial manager’s financing function? a. Prioritizing investments based on properly computed capital rationing method. b. Capital budgeting computation and decision with regards to the planned acquisition. c. Assessing and selecting a long-term and short-term financing tools that has a low cost. d. Monitoring trends in operating expenses for the purpose of budget allocation.arrow_forwardwhat is another name for tactical planing a) Budgetary planing b) operation planing c) strategic planing d) Corporate planingarrow_forwardOutlining the capital budgeting process Review the following activities of the capital budgeting process: a. Budget capital investments. b. Project investments’ cash flows. c. Perform post-audits. d. Make investments. e. Use feedback to reassess investments already made. f. Identify potential capital investments. g. Screen/analyze investments using one or more of the methods discussed. Place the activities in sequential order as they occur in the capital budgeting process.arrow_forward
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