General Studies · Capital Budgeting
What is the primary objective of determining the Optimal Capital Budget for a firm?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1To ensure the firm spends the exact amount of money raised during the year.
- 2To select the combination of projects that maximizes the overall Net Present Value (NPV) of the firm.✓
- 3To maximize the firm's investment in Capital Expenditure regardless of the return.
- 4To minimize the firm's Weighted Average Cost of Capital (WACC).
Correct answer
To select the combination of projects that maximizes the overall Net Present Value (NPV) of the firm.
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