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  3. 1. “since capital budgeting decisions involve th

1. “Since capital budgeting decisions involve the estimation of a project’s future cash flows and the...

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Finance

1. “Since capital budgeting decisions involve the estimation ofa project’s future cash flows and the rate at which they should bediscounted is still a relatively subjective process, the behavioraltraits of managers still affect this process.” Discuss thisstatement and suggest how managers can better improve their abilityto eliminate biases in their forecasting.

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Capital budgeting refers to process of evaluation and selection of investments that coorelate with the organisations goal It inclues Evaluation of projects that relate to organisational objectives Estimation and evuation of    See Answer
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1. “Since capital budgeting decisions involve the estimation ofa project’s future cash flows and the rate at which they should bediscounted is still a relatively subjective process, the behavioraltraits of managers still affect this process.” Discuss thisstatement and suggest how managers can better improve their abilityto eliminate biases in their forecasting.

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