Economics Capital Budgeting Questions
The impact of project flexibility on capital budgeting decisions is that it allows for the consideration of various scenarios and potential changes in the future. This flexibility enables decision-makers to assess the risks and uncertainties associated with the project and make more informed investment decisions. It also allows for adjustments to be made during the project's lifespan, such as reallocating resources or changing the project's scope, based on changing market conditions or new information. Overall, project flexibility enhances the ability to adapt and respond to changing circumstances, improving the effectiveness of capital budgeting decisions.