what is capital budgeting and techniques of capital
budgeting.
Answer Posted / kavyashree prabhakar
Capital budgeting is the process of managing the long-term
capital of a firm in the most profitable way. The prime
task of the capital budgeting is to estimate the
requirements of capital investment of a business. The
capital allocation to various projects depending on their
needs and selection of proper project for the business also
fall under the canopy of capital budgeting concept.
Some of the major techniques of capital budgeting are:
• Profitability index
• Net present value
• Modified Internal Rate of Return
• Equivalent annuity
• Internal rate of return
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