The correct answer is: A. Long-term Decisions
Capital budgeting is the process of planning and managing a company’s long-term investments. It involves identifying, evaluating, and selecting the best long-term projects for the company. Capital budgeting decisions are typically made by the company’s top management team, and they can have a significant impact on the company’s future success.
Short-term decisions, on the other hand, are those that are made on a day-to-day basis. They typically involve managing the company’s day-to-day operations, such as production, inventory, and marketing. Short-term decisions are typically made by the company’s middle management team.
Here are some examples of long-term decisions:
- Building a new factory
- Developing a new product
- Acquiring another company
Here are some examples of short-term decisions:
- Setting production levels
- Ordering inventory
- Pricing products
Capital budgeting is an important part of a company’s financial planning process. By carefully planning and managing its long-term investments, a company can increase its chances of success in the future.