Question

How important is Capital Budgetung (a.k.a the Business Development process) to the maintenance and creation of products and jobs in the economy?

Answer 1

Capital Budgeting is very important for every business. Because there should be a proper budgetary control in the firm for its proper allocation of funds. Otherwise managers can not control the cash inflow and outflow.

Capital budgeting is the planning process which discussing that how the organization should investment for long term, how much funds should allocate for new machinery,new plants, new products, and research development projects and how the capital should use for the development of the firm. So the major advantage of capital budgeting are , it will help the company to identify the risk and also helps to reduce those risk. With that capital budgeting will helps to make proper allocation of funds and helps to identify the opportunities in investments.

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