3. The capital budgeting process

Capital budgeting involves evaluating the value of long-term assets or projects.

Which of the following should be included in the capital budgeting process? Check all that apply.

Include all relevant cash flows.

Compare the present value of the cash flows to the initial investment or cost required to acquire the asset.

Compute the accounting rate of return.

Estimate the future cash flows associated with the project.

Evaluate the riskiness of the projected cash flows.