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Hospitality Industry Managerial Accounting 8th Edition

Hospitality Industry Managerial Accounting (8th Edition)

Book Edition8th Edition
Author(s)Schmidgall
ISBN9780866124973
PublisherEduc. Inst. Of The American Hotel & Motel Assoc.
SubjectAccounting

Chapter 13, End of Chapter, Review Questions, Exercise 1

Page 659

Here is a tip:

Capital budgeting helps in identifying investment opportunities and evaluating all the proposals. 

Explanation

  • Capital budgeting helps in evaluating investments and projects used by companies.
  • The major techniques of capital budgeting include net present value, payback period method, internal rate of return, accounting rate of return, and profitability index.
  • It also helps in determining the right sources of funds and controlling the expenditure. 

Verified Answer

The process that helps in purchasing and verifying the amount to be spent on property and equipment is referred to as capital budgeting.

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