Capital budgeting is a process a firm uses to make decisions concerning investments in the long-term assets of the firm. Discuss the importance of capital budgeting in the company's financial decisions. (10 marks)

Capital expenditure decisions are of considerable significance to the firm as the future success and growth of the firm depend heavily on the capital budgeting approach. Unfortunately, it is not easy to take. Explain the application of capital budgeting into the business and the difficulties of the firm in the capital budgeting process. (15 marks)

Capital budgeting allows managers to use methods to allocate scarce capital to such investments in the most value-accretive manner. Elaborate on how the firm manages the capital budgeting decision. (15 marks)