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8 May, 08:46

What are some examples of potential intangible benefits of investment proposals? Why do these intangible benefits complicate the capital budgeting evaluation process? What might happen if intangible benefits are ignored in a capital budgeting decision?

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  1. 8 May, 08:52
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    Answer: The answer is provided below

    Explanation:

    An intangible benefit is a subjective benefit that one can't actually touch, and is also difficult to measure in terms of dollar.

    Examples of potential intangible benefits of investment proposals will be the improved safety, increased product quality, and an enhanced employee loyalty.

    Intangible benefits complicate capital budgeting evaluation process due to the fact that they can't be easily measured, hence, their value can be hard to quantify.

    When intangible benefits are ignored in a capital budgeting decision, it

    may result in rejecting of projects that may have financial benefits to the company.
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