Capital Budgeting decision is one of the most important decisions management can make. Why is this so?
Capital Budgeting is a process that is closely concerned with determining the nature of investment a company makes in capital equipments and other facilities. These capital decision generally involve substantial amount of investments, cannot be reversed easily, take long time to implement, and continue to impact the ability and performance of the company over long period. All these features of capital decision make the capital budgeting one of the most important decision that managers of any company are required to make.