Capital budgeting process:-

1.Idetify
7.Review
investmen
performance
t proposal

2.Screen
6.Implem- CAPITAL Proposal
ent the BUDGETING
1
proposal PROCESS 3.Evaluate
various
proposal
5.Final
approval 4.Fix
priorities
1. Identification of investment proposals
2. Screening proposals
3. Evaluation of various proposals
4. Fixing priorities
5. Final approval and preparation of capital
expenditure budget
6. Implementing proposal
7. Performance review
 Kinds of capital budgeting :-
•Capital budgeting refers to the total process of generating, evaluating,

selecting and following up on capital expenditure alternatives. The firm

allocates or budgets financial resources to new Investment proposals.

Basically, the firm may be confronted with three types of capital budgeting

decisions:
 
• 1.        Accept-Reject Decision
 
• 2.       Mutually Exclusive Project Decision
 
• 3.       Capital Rationing Decision