Question

Explain capital budgeting

Answer 1

Capital Budgeting

Capital budgeting means planning for capital assets.

It is to be decided whether money should be invested in long term projects like setting up a new factory or ínstalling machinery etc...

There may be various proposals regarding capital expenditure.

We are required to choose the best out of various alternatives.

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Answer 2

Answer:

Capital budgeting, and investment appraisal, is the planning process used to determine whether an organization's long term investments such as new machinery, replacement of machinery, new plants, new products, and research development projects are worth the funding of cash through the firm's capitalization structure