Why is Capital Budgeting an important technique for companies wishing to assess an investment in projects? Which technique would you recommend to management?
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 ...
The solution discusses the importance of capital budgeting and recommends a technique.