Capital budgeting process True or false? a. The approval of a capital budget allows managers to go ahead with any project included in the budget. b. Capital budgets and project authorizations are mostly developed “bottom up.” Strategic planning is a “top-down” process. c. Project sponsors are likely to be overoptimistic.

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Answer 1

Textbook Question

Chapter 10, Problem 1PS

Capital budgeting process True or false?

a. The approval of a capital budget allows managers to go ahead with any project included in the budget.
b. Capital budgets and project authorizations are mostly developed “bottom up.” Strategic planning is a “top-down” process.
c. Project sponsors are likely to be overoptimistic.

Expert Solution & Answer

Summary Introduction

To discuss: Whether the given statements are true or false.

Explanation of Solution

a) The capital budget is not a complete sign-off for particular projects. Many of the firms need a correct request for individual project with a brief analysis.

Hence, option A is false.

b) The strategic planning needs to consider the alternatives. The project authorizations and capital budgets are generally developed “bottom up”. The strategic planning is a “top-down process”.

Hence, option B is true.

c) The sponsors of the project are mostly overoptimistic and the forecasts of the cash flow are often overstated.

Hence, option C is true.

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Students have asked these similar questions

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Answer 2

Textbook Question

Chapter 10, Problem 1PS

Capital budgeting process True or false?

a. The approval of a capital budget allows managers to go ahead with any project included in the budget.
b. Capital budgets and project authorizations are mostly developed “bottom up.” Strategic planning is a “top-down” process.
c. Project sponsors are likely to be overoptimistic.

Expert Solution & Answer

Summary Introduction

To discuss: Whether the given statements are true or false.

Explanation of Solution

a) The capital budget is not a complete sign-off for particular projects. Many of the firms need a correct request for individual project with a brief analysis.

Hence, option A is false.

b) The strategic planning needs to consider the alternatives. The project authorizations and capital budgets are generally developed “bottom up”. The strategic planning is a “top-down process”.

Hence, option B is true.

c) The sponsors of the project are mostly overoptimistic and the forecasts of the cash flow are often overstated.

Hence, option C is true.

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Answer 3

Textbook Question

Chapter 10, Problem 1PS

Capital budgeting process True or false?

a. The approval of a capital budget allows managers to go ahead with any project included in the budget.
b. Capital budgets and project authorizations are mostly developed “bottom up.” Strategic planning is a “top-down” process.
c. Project sponsors are likely to be overoptimistic.

Expert Solution & Answer

Summary Introduction

To discuss: Whether the given statements are true or false.

Explanation of Solution

a) The capital budget is not a complete sign-off for particular projects. Many of the firms need a correct request for individual project with a brief analysis.

Hence, option A is false.

b) The strategic planning needs to consider the alternatives. The project authorizations and capital budgets are generally developed “bottom up”. The strategic planning is a “top-down process”.

Hence, option B is true.

c) The sponsors of the project are mostly overoptimistic and the forecasts of the cash flow are often overstated.

Hence, option C is true.

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Answer 4

Textbook Question

Chapter 10, Problem 1PS

Capital budgeting process True or false?

a. The approval of a capital budget allows managers to go ahead with any project included in the budget.
b. Capital budgets and project authorizations are mostly developed “bottom up.” Strategic planning is a “top-down” process.
c. Project sponsors are likely to be overoptimistic.

Expert Solution & Answer

Summary Introduction

To discuss: Whether the given statements are true or false.

Explanation of Solution

a) The capital budget is not a complete sign-off for particular projects. Many of the firms need a correct request for individual project with a brief analysis.

Hence, option A is false.

b) The strategic planning needs to consider the alternatives. The project authorizations and capital budgets are generally developed “bottom up”. The strategic planning is a “top-down process”.

Hence, option B is true.

c) The sponsors of the project are mostly overoptimistic and the forecasts of the cash flow are often overstated.

Hence, option C is true.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

Summary Introduction

To discuss: Whether the given statements are true or false.

Explanation of Solution

a) The capital budget is not a complete sign-off for particular projects. Many of the firms need a correct request for individual project with a brief analysis.

Hence, option A is false.

b) The strategic planning needs to consider the alternatives. The project authorizations and capital budgets are generally developed “bottom up”. The strategic planning is a “top-down process”.

Hence, option B is true.

c) The sponsors of the project are mostly overoptimistic and the forecasts of the cash flow are often overstated.

Hence, option C is true.

Answer 8

Expert Solution & Answer

Summary Introduction

To discuss: Whether the given statements are true or false.

Explanation of Solution

a) The capital budget is not a complete sign-off for particular projects. Many of the firms need a correct request for individual project with a brief analysis.

Hence, option A is false.

b) The strategic planning needs to consider the alternatives. The project authorizations and capital budgets are generally developed “bottom up”. The strategic planning is a “top-down process”.

Hence, option B is true.

c) The sponsors of the project are mostly overoptimistic and the forecasts of the cash flow are often overstated.

Hence, option C is true.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Summary Introduction

To discuss: Whether the given statements are true or false.

Answer 12

Explanation of Solution

a) The capital budget is not a complete sign-off for particular projects. Many of the firms need a correct request for individual project with a brief analysis.

Hence, option A is false.

b) The strategic planning needs to consider the alternatives. The project authorizations and capital budgets are generally developed “bottom up”. The strategic planning is a “top-down process”.

Hence, option B is true.

c) The sponsors of the project are mostly overoptimistic and the forecasts of the cash flow are often overstated.

Hence, option C is true.

Answer 13

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