Discuss the capital budgeting process, and include the following:
- Investment opportunities
- Data needed
- Decision making
Organizations use a capital budget in order to determine the long-term investments they will make with the goal of increasing profits and minimizing costs. When looking at several different investment opportunities, companies use the capital budget to compare each investment and the period in which each will start generating profits on the funds capitalized and eventually choosing the investment with the highest expected rate of return. This budget can also help determine the level of risk associated with each investment opportunity, ...
This solution includes a detailed explanation of the capital budgeting process along with some of the reasons why organizations use capital budgeting. The solution contains 340 words of text.