MANAGEMENT

Detailed explanation-1: -Answer: Capital budgeting is officially a part of investment decisions. It helps in working on the ideas and projects which in turn helps the company in earning more revenues through the investment. It has an important part in investment decisions.

Detailed explanation-2: -Investment Decisions, also known as Capital Investment Decisions are the most important financial decisions that an enterprise makes to utilize its funds to secure benefits over a period of time. It’s an integral component of the strategic decision-making of an enterprise or organization.

Detailed explanation-3: -Capital budgeting is vital in marketing decisions. Decisions on investment, which take time to mature, have to be based on the returns which that investment will make. Unless the project is for social reasons only, if the investment is unprofitable in the long run, it is unwise to invest in it now.

Detailed explanation-4: -What Is Capital Budgeting? Capital budgeting is the process a business undertakes to evaluate potential major projects or investments. Construction of a new plant or a big investment in an outside venture are examples of projects that would require capital budgeting before they are approved or rejected.

Detailed explanation-5: -A capital budgeting decision is typically a go or no-go decision on a product, service, facility, or activity of the firm. That is, we either accept the business proposal or we reject it. 2. A capital budgeting decision will require sound estimates of the timing and amount of cash flow for the proposal.