1. The capital budget for the year is approved by a company sA) board of directorsB) capital budgeting committeeC) officersD) stockholders.2. When a capital budgeting project generates a positive net present value this means that the project earns a return higher than theA) internal rate of return.B) annual rate of return.C) required rate of return.D) profitability index.3. Performing a post-audit is important becauseA) managers will be more likely to submit reasonable data when they make investment proposals if they know their estimates will be compared to actual results.B) it provides a formal mechanism by which the company can determine whether existing projects should be terminated.C) it improves the development of future investment proposals because managers improve their estimation techniques by evaluating their past successes and failures.D) all of these.4. Intangible benefits in capital budgetingA) should be ignored because they are difficult to determine.B) include increased quality or employee loyalty.C) are not considered because they are usually not relevant to the decision.D) have a rate of return in excess of the company s cost of capital.
