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IMANET Exam CMA Topic 6 Question 32 Discussion

Actual exam question for IMANET's Certified Management Accountant exam
Question #: 32
Topic #: 6
[All Certified Management Accountant Questions]

Of the following decisions, capital budgeting techniques would least likely be used in evaluating the

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Suggested Answer: D

Capital budgeting is the process of planning expenditures for investments on which the returns are expected to occur over a period of more than 1 year. Thus, capital budgeting concerns the acquisition or disposal of long-term assets and the financing ramifications of such decisions. The adoption of a new method of allocating, nontraceable costs to product lines has no effect on a company's cash cows, does not concern the acquisition of long- term asset and is not concerned with financing Hence, capital budgeting is irrelevant to such a decision.


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