1. Capital budgeting is the process of identifying, analyzing and selecting investment projects whose cash flows will all be received within one year. 2. A capital investment involves making a current cash outlay in the expectation of future benefits. 3. It could be said that a firm's future success depends on its capital investments. 4. A project's contributions to net income over time constitute the primary potential benefits of investment in the project. 5. All anticipated cash coming into or going out of the firm as a result of a capital investment should be used in capital budgeting decisions