Question

All of the following are factors that may complicate capital investment analysis except a.qualitative factors. b.changes in price levels. c.the federal income tax. d.the age of the current fixed assets.

Answer 1

Answer:

d.the age of the current fixed assets.

Explanation:

The age of current fixed assets is straight forward since it was set at start of operation based on company`s usage thus within the entity`s control.

However the other factors makes  capital investment analysis complex as they are not within the entity`s control.

Answer 2

Answer:

Correct Answer:

a.qualitative factors.

Explanation:

Capital investment analysis is the process by which management plans, evaluates, and controls long-term investment decisions involving fixed assets. For example, in a situation where a decision was taken to install new equipment, replace old equipment, and purchase or construct a new building.