Question

Identify the incorrect statement with respect to ‘Investment decision’:

विकल्प

• Net working capital refers to excess of current assets over current liabilities.

• Current assets are those assets which get converted into cash within one year.

• Capital budgeting decisions are irreversible.

• Size of the assets, Profitability and competitiveness are not affected by capital budgeting decisions.

Answer 1

Size of the assets, Profitability and competitiveness are not affected by capital budgeting decisions.

Explanation:

This statement is incorrect because capital budgeting decisions significantly impact the size of the assets, profitability, and competitiveness of a firm by determining long-term investments in projects and assets.