Which one of the following terms is defined as the management of a firm's long-term investments? Multiple Choice Working capital management Financial allocation Agency cost analysis Capital budgeting Capital structure

Capital budgeting

Explanation:

Capital budgeting is a technique employed by a business firm in making decision as regards accepting or rejecting a proposal for the purchase of fixed asset.

A quantitative review of fixed asset purchase being proposed is carried using this method so that a judgement can be made on rational basis, and the long-term economic and financial profitability of any investment project can be determined and ensured.

The importance of capital budgeting is that it ensures accountability and measurability.