Which one of the following questions involves a capital budgeting decision? A. Multiple Choice How many shares of stock should the firm issue? B. Should the firm purchase a new machine for the production line? C. Should the firm borrow money to acquire new equipment? D. How much inventory should the firm keep on hand? E. How much money should be kept in the checking account?

Answer

B. Should the firm purchase a new machine for the production line?

A: Define capital budgeting decision which is the process of analyzing investments or expenses to determine the return on investment (ROI) or payback period.
Q: Which question involves a capital budgeting decision? A: Option B. Should the firm purchase a new machine for the production line?