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13 June, 10:59

Fairfax Pizza borrowed 745,000 dollars to build a new restaurant for 745,000 dollars. The decision to spend 745,000 dollars on the restaurant is best classified as an example of what type of decision?

O Capital budgeting decision

O Financing decision

O stakeholder decision

O Agency decision

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  1. 13 June, 14:45
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    Financing decision

    Explanation:

    Financing decision is concerned with borrowing and allocating funds for investments.

    As such, the decision to borrowed 745,000 dollars and use the fund to build a new restaurant for 745,000 dollars is a financing decision.

    Capital Budgeting decision-making process involves plans around any long term capital expenditures whose returns (cash inflows and outflow) are expected to be earned in more than a year.
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