MANAGEMENT

Detailed explanation-1: -The firm invests its funds in acquiring fixed assets as well as current assets. When decisions regarding fixed assets are taken it is also called capital budgeting decision.

Detailed explanation-2: -The long term investment decision is also known as capital budgeting decision.

Detailed explanation-3: -Capital budgeting is the process that a business uses to determine which proposed fixed asset purchases it should accept, and which should be declined. This process is used to create a quantitative view of each proposed fixed asset investment, thereby giving a rational basis for making a judgment.

Detailed explanation-4: -The capital budgeting process is also known as investment appraisal.

Detailed explanation-5: -A capital budgeting decision is both a financial commitment and an investment. By taking on a project, the business is making a financial commitment, but it is also investing in its longer-term direction that will likely have an influence on future projects the company considers.