Long-term capital budgeting proposals are normally expected to incur negative cash flows in the initial time period,but eventually they should generate positive cash flows.

Question

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Long-term capital budgeting proposals usually require large upfront investments in assets, equipment, or technology, which result in negative cash flows in the initial years. However, these investments are expected to generate positive cash flows in the future through increased revenues, reduced costs, or other benefits. Thus, evaluating the feasibility of capital budgeting proposals requires considering the timing, magnitude, and uncertainty of these cash flows over the project's life.

Long-Term Capital Budgeting Proposals Are Normally Expected to Incur Negative