Question 2

Capital budget is the process of creating a long run planning decisions for investments in projects (Horngren, 2015). The managers will make decision in selecting a few of the various projects that may run into several periods. In order to make the right or most viable decisions, the managers need to analyse each project by considering all the life-span cash flows from its initial investment through its termination or end of the project.

Describe the stages involved in making the capital budget decision.