MANAGERIAL ACCOUNTING CONNECT ACCESS
MANAGERIAL ACCOUNTING CONNECT ACCESS
17th Edition
ISBN: 9781265750879
Author: Garrison
Publisher: MCG
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Chapter 14, Problem 1Q
To determine

Concept Introduction:

Capital planning screening choices is a choice taken to decide whether a proposed venture meets certain preset necessities, for example, those in a cost/advantage examination. For instance, will that new bit of machine spare the organization enough cash to pay for itself, and are these funds more noteworthy than the arrival the organization could have gotten by essentially putting the price tag into the bank and accepting enthusiasm over an indistinguishable period from the helpful existence of the machine? On the off chance that the appropriate response is no, it isn't to the organization's leeway to get it.

Capital planning inclination choices is a planning choice. The organization thinks about a few elective tasks that have met their screening criteria - whether a base rate of return or some other measure of convenience - and positions they arranged by attractive quality. The chiefs at that point select the speculation or strategy that best meets organization objectives.

Difference between capital budgeting screening decisions and capital budgeting preference decision.

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Explanation of Solution

Solution:

At the point when an independent venture is pondering a noteworthy interest in its own particular future development, it is said to settle on a capital planning choice. Capital planning includes the outpouring of huge measures of cash. The organization spends this cash with the expectation that the activities will bring about an incredible cost reserve funds or increment in future benefits. There are two sorts of capital planning choices:

i) Screening: It identifies whether a proposed venture passes a preset obstacle, and

ii) Preference: It identifies with choosing among a few contending strategies.

The contrast between these two capital planning, screening choices and inclination choices is that screening choices identify with whether a proposed venture passes a preset obstacle, while inclination choices identify with choosing among a few contending game-plans

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Chapter 14 Solutions

MANAGERIAL ACCOUNTING CONNECT ACCESS

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