What is capital budgeting and why is it important to business decisions?

Assignment 1: Capital Budgeting

Capital budgeting is a tool used in business to determine the  financial viability of a potential project. Net present value, internal  rate of return, payback, discounted payback, and modified rate of return  are some of the calculations used once businesses have a reliable cash  flow budget for their project.

In this assignment, you will demonstrate your understanding of the necessary aspects of capital budgeting.

Tasks:

Respond to the following:

  • What is capital budgeting and why is it important to business decisions?
  • Discuss how the information should be organized in a capital  budgeting process, and who will use the information for decision-making.
  • What could go wrong with the capital budgeting process?
  • Provide an example of a capital budgeting process from an online  source and explain the salient points of this example to the class.

In a minimum of 300-500 words, post your responses using critical thinking and analysis.

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