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Capital Budgeting

Why is Capital Budgeting an important technique for companies wishing to assess an investment in projects? Which technique would you recommend to management?

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A capital expenditure is made by a company whenever it makes an expenditure that generates a cash flow benefit for more than one year. Examples of capital expenditure include the purchase of new equipment, expansion of production facilities, buying another company, acquiring new technologies, launching a research & development program, etc. These are important decisions for the company.

Capital expenditures decisions are ...

Solution Summary

The solution discusses the importance of capital budgeting and recommends a technique.