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    Question

    Which of the following is NOT a capital budgeting decision?

    A Modernisation of a plant Correct Answer Incorrect Answer
    B Purchase of a computer Correct Answer Incorrect Answer
    C Purchase of raw material Correct Answer Incorrect Answer
    D Purchase of a machine Correct Answer Incorrect Answer

    Solution

    Capital budgeting decisions involve evaluating and selecting long-term investment projects or expenditures that have significant financial implications for the organization. Options a, b, and d all involve long-term investment decisions. On the other hand, option c, the purchase of raw materials, is not a capital budgeting decision. The purchase of raw material is typically part of the day-to-day operational activities and falls within the realm of working capital management rather than capital budgeting.

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