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CS Executive · Corporate Accounting and Financial Management · Capital Budgeting

In the capital budgeting process, which sequence of stages is the most logical?

The logical sequence is generating project proposals, screening and evaluating them, selecting and approving the best, implementing them, and finally conducting a post-completion review. Evaluation and approval cannot precede proposal generation, and review can occur only after implementation.

  1. AProject evaluation, generation of proposals, implementation, performance review
  2. BGeneration of proposals, screening and evaluation, selection and approval, implementation and post-completion reviewCorrect
  3. CImplementation, evaluation, generation of proposals, approval
  4. DApproval, generation of proposals, review, implementation

Explanation

Ideas must first be identified, then screened and evaluated using appraisal techniques, then approved, then implemented, and finally reviewed against expectations. Options placing evaluation or approval before proposals are impossible, as there would be nothing to evaluate or approve.

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