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Unit 11 - Long Term investment decisions, Importance of Capital Budgeting,…
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CAPITAL BUDGETING
Capital budgeting is the art of locating assets that are worth more than they cost to accomplish a predetermined target, such as maximizing a company’s wealth. Capital investment necessitates a cash outflow shortly in exchange for future returns
Capital budgeting can be described as the mechanism by which businesses determine the purchasing of major fixed assets, such as machinery, equipment, buildings as well as the acquisition of other businesses, either through the purchase of equity shares or a group of assets, to conduct ongoing operations.
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