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The most important function of financial management is not only the procurement of external funds for the business

but also to make efficient & allocation of these funds. The allocation of funds means the investment of funds in various assets & other activities. It is also known as Investment Decision.

MEANING OF CAPITAL BUDGETING


Capital budgeting is the technique of making decisions for investment in long- term assets. It is a process of deciding whether or not to invest the funds in a particular assets, the benefit of which will be available over a period of time longer than one year.

Definition of capital budgting

According to CHARLES.T. HORNGREEN, Capital

budgeting is long term planning for making & financing purposed capital outplay.

Feature of capital budgeting


funds are invested in long term assets. 2. Present times in anticipation of future profits. 3. The future profits will occur to the firm over a series of years. 4. It involves a high degree of risk.
1.

Kinds of capital budgeting


1. accept- reject decision.

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