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 tangible assets. Capital budgeting is a long term economic and financial planning decisions for making the proposed capital outlays. planning of eventual returns on long term investments in machinery, real estate, plant, building, and new technology or research are all examples of the capital budgeting.
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