Explain how each of the following actions or problems can distort or disrupt the capital budgeting process.

Question:

Explain how each of the following actions or problems can distort or disrupt the process.
a. Overoptimism by project sponsors.
b. Inconsistent forecasts of industry and macroeconomic variables.
c. organized solely as a bottom-up process.

Capital Budgeting
Capital budgeting is a practice or method of analyzing investment decisions in capital expenditure, which is incurred at a point of time but benefits are yielded in future usually after one year or more, and incurred to obtain or improve the...