Which of the following is a limitation of Capital Budget Models?

The selection that Capital Budget Models only consider tangible benefits is correct as these models primarily evaluate and quantify financial returns related to physical assets or investments. Tangible benefits are measurable and quantifiable, such as increased revenue or cost savings, which are central to the analysis performed in capital budgeting.

Capital Budget Models are designed to assess the financial viability of long-term investments by projecting their cash flows. These models weigh factors such as depreciation, tax implications, and cash inflows against costs to determine profitability and feasibility. Consequently, they might overlook or diminish the value of intangible benefits like brand reputation, customer satisfaction, or employee morale, which are not easily quantifiable but can significantly affect a company's overall performance.

By focusing primarily on tangible benefits, these models may miss a comprehensive view of potential outcomes, leading to decisions that do not account for longer-term strategic value. It is essential in business management to consider both tangible and intangible factors for a more holistic investment perspective, which is a recognized limitation of traditional Capital Budget Models.