1.Which of the following steps is least likely to be an administrative step in the capital budgeting process?

A)   Arranging financing for capital projects.

B)   Conducting a post-audit to identify errors in the forecasting process.

C)   Prioritizing projects according to project profitability and company resources.

D)   Forecasting cash flows and analyzing project profitability.

2.Which of the following types of capital budgeting projects are most likely to generate little to no revenue?

A)   Regulatory projects.

B)   New product or market development.

C)   Expansion projects.

D)   Replacement projects to maintain the business.

答案和详解如下：

1.Which of the following steps is least likely to be an administrative step in the capital budgeting process?

A)   Arranging financing for capital projects.

B)   Conducting a post-audit to identify errors in the forecasting process.

C)   Prioritizing projects according to project profitability and company resources.

D)   Forecasting cash flows and analyzing project profitability.

The correct answer was A)

Arranging financing is not one of the administrative steps in the capital budgeting process. The four administrative steps in the capital budgeting process are:

  Idea generation

  Analyzing project proposals

  Creating the firm-wide capital budget

  Monitoring decisions and conducting a post-audit

2.Which of the following types of capital budgeting projects are most likely to generate little to no revenue?

A)   Regulatory projects.

B)   New product or market development.

C)   Expansion projects.

D)   Replacement projects to maintain the business.

The correct answer was A)

Mandatory regulatory or environmental projects may be required by a governmental agency or insurance company and typically involve safety-related or environmental concerns. The projects typically generate little to no revenue, but they accompany other new revenue producing projects and are accepted by the company in order to continue operating.