
Concept explainers
Introduction:
Capital Budgeting: Capital budgeting is a technique to make decisions for investment of the capital of the business. Capital budgeting uses several methods to identify and evaluate projects and helps in making decisions for investment. Capital budgeting has following basic steps:
1. Identification of the opportunities or projects
2. Evaluation of projects
3. Determination of
4. Making decision of investment in the project
5. Implementation of the decisions
To Choose: The Second step of Capital Budgeting

Answer to Problem 1QC
Solution: c. Getting the accountant involved
Explanation of Solution
Explanation for Correct answer:
The Second step of Capital Budgeting is Evaluation of projects or opportunities available, which requires the involvement of the accountant to use estimated data and methods of capital budgeting to determine if the project would be profitable or not.
Explanation for Incorrect answers:
a. Gathering the money for investment is the last step of the capital budgeting when actual implementation of the project is done.
b. identifying potential projects is the first step of the capital budgeting.
d. All the given options are different steps of the capital budgeting.
Hence, the Second step of Capital Budgeting is c. Getting the accountant involved.
Want to see more full solutions like this?
Chapter 26 Solutions
Horngren's Accounting
- please give me true answer accounting questionarrow_forwardplease give me true answerarrow_forwardSharon Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Carla Vista Company's six divisions. Sharon made the following presentation to Carla Vista's board of directors and suggested the Percy Division be eliminated. "If the Percy Division is eliminated," she said, "our total profits would increase by $25,300." The Other Five Divisions Percy Division Total Sales $1,663,000 $100,900 $1,763,900 Cost of goods sold 978,400 76,500 1,054,900 Gross profit 684,600 24,400 709,000 Operating expenses 528,500 49,700 578,200 Net income $156,100 $(25,300 ) $130,800 In the Percy Division, cost of goods sold is $60,100 variable and $16,400 fixed, and operating expenses are $29,100 variable and $20,600 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued. Is Sharon right about eliminating the Percy Division? Prepare a schedule to support your answer. (Enter negative amounts using either a negative sign preceding…arrow_forward
- managerial accountingarrow_forwardi need correct optionarrow_forwardMark purchased 200 shares of stock for $40 per share. During the year, he received $500 in dividends. He recently sold the stock for $55 per share. What was Mark's return on the stock? a) $3,500 b) $4,000 c) $3,900 d) $4,500arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





