budgeting
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter12: Corporate Valuation And Financial Planning
Section: Chapter Questions
Problem 3Q
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Question
1. What is opportunity cost and why is it an important concept in the capital budgeting process? The opportunity cost concept applies to almost every financial decision we make as individuals. Can you give an example from your own experience?
2. What is capital rationing from the perspective of capital budgeting?
3. Give an example of a strength and a weakness of the accounting rate of return approach.
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