|A) planning future financing needs||B) minimizing the cost of capital|
|C) capital formation in the economy||D) evaluating investment alternatives|
Answer: D) evaluating investment alternatives
Capital budgeting is the process by which a company or an industry determines whether projects such as investing in R&D, opening a new branch, replacing a machine are worth pursuing. A project is worth pursuing if it increases the value of the company. Capital budgeting also known as investment appraisal.
It is primarily concerned with evaluating investment alternatives.