Which is the simplest capital budgeting technique?  

Capital budgeting refers to the practice of planning and controlling an organisations activities involving expenditure in physical facilities and other long term investments. Capital budgeting itself is considered a management planning and control technique, it it is not usual to talk of different techniques of capital budgeting.

The technique of capital budgeting can be simple or complicated depending upon the complexity of decision making in the area of capital expenditures and the degree of control required. A stable company with no major capital expenditure is not likely to need a very elaborate capital expenditure company. For example, a small and stable proprietorship company buying a new car for the use of owner need not have an elaborate budgeting system to plan and control such capital expenditure. In comparison a company that is fast expanding and is regularly increasing its production capacity, for example a power generation utility in a developing economy is likely to need more elaborate system of capital budgeting.

A budgeting system will be simple when the total capital expenses are not divided in to many sub-heads, when the organisational process of approving the capital expenses are simple, and when the monitoring and reporting of capital expenditure in not too frequent and detailed. Thus, though we do not classify budgeting techniques as simple or complicated, it is possible to have simple or complex capital budgets depending on requirements of individual organizations.