[amp_mcq option1=”is related to fixed assets” option2=”brings long-term benefits” option3=”brings short-term benefits only” option4=”has very large investment” correct=”option3″]
The correct answer is: C. brings short-term benefits only.
A capital budgeting proposal is a plan for a significant investment in a project or asset. The goal of capital budgeting is to make decisions that will maximize the long-term value of the company. Therefore, a proposal that brings short-term benefits only is not a capital budgeting proposal.
Option A is incorrect because capital budgeting proposals can be related to fixed assets. For example, a company might propose to purchase a new piece of equipment.
Option B is incorrect because capital budgeting proposals can bring long-term benefits. For example, a company might propose to build a new factory.
Option D is incorrect because capital budgeting proposals can have very large investments. For example, a company might propose to acquire another company.