How does the capital budget help mitigate the following potential problems? a. Over-optimism by project sponsors. b.

Question:

How does the capital budget help mitigate the following potential problems?
a. Over-optimism by project sponsors.
b. Inconsistent forecasts of 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...