Which of the following would not involve a capital-budgeting analysis?

A. The acquisition of new equipment.

B. The adoption of a new cost driver for overhead application.

C. The construction of a new distribution facility.

D. All of the above would involve a capital-budgeting analysis.

E. None of the above would involve a capital-budgeting analysis.

Question

Business

Freddy Landry

6 May, 15:14

Which of the following would not involve a capital-budgeting analysis?

A. The acquisition of new equipment.

B. The adoption of a new cost driver for overhead application.

C. The construction of a new distribution facility.

D. All of the above would involve a capital-budgeting analysis.

E. None of the above would involve a capital-budgeting analysis.

+1

Answers (1)

Know the Answer?

Abbigail Bruce · Answer 1

The correct answer is B. The adoption of a new cost driver for overhead application.

Explanation:

This option is chosen because it is not directly related to organizational capital, or the production of goods or the provision of services. Otherwise it happens with options A and C, which does merit an analysis of the capital budget.

Option B is only taken into account in the analysis of the sales budget or production costs.