CMA Practice Test & Exam Prep | Sri Lanka

What role does capital budgeting play in financial strategy formulation?

It determines the optimal debt-to-equity ratio. It involves decisions on how to allocate capital to long-term investments. It focuses on managing short-term assets and liabilities. It dictates the company's dividend payout policy.

Correct Answer:

It involves decisions on how to allocate capital to long-term investments.

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