Answer (D) is correct . The capital budgeting process is a method of planning the efficient expenditure of the firm’s resources on capital projects. Such planning is essential in view of the rising costs of scarce resources.
Answer (A) is incorrect because Capital budgeting may also be used for analysis of multiple profitable alternatives and of lease-or-buy decisions.
Answer (B) is incorrect because Capital budgeting permits analysis of adding or discontinuing product lines or facilities and of lease-or-buy decisions.
Answer (C) is incorrect because The lease-or-buy decision is just one specific example of an appropriate use of capital budgeting techniques.
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