Question

why capital budgeting is so significant ?

Answer 1

Capital budgeting is a process helps to plan a project in terms of long term point of view. This is significant because it creates accountability and measurability of any project. It takes all the angle of any project so that company or any firm can judge it's project whether it would be profitable or not. It actually gives an idea to the firm whether any investment should be choosen or not. So, the undertake of any project or start of any project determine by capital budgeting. Capital budgeting also gives the idea of ranking of proposed projects.