Nature Of Capital Budgeting Assignment Help

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Nature of Capital Budgeting

Before we understand what nature of Capital Budgeting is, let’s first give you a brief understanding about Capital Budgeting. This subject can be explained as a process which is involved in making of decisions which are related to fixed asset investment that at no point are picked for sale. Some examples of this type of fixed assets are furniture, land, machinery and building.
Now, it has time to talk about nature of Capital budgeting,

They are as follows

• After approval, it is represented as long term investment and thus with suffering from a loss it cannot be withdrawn or reserved.
• The involvement of huge fixed assets investments in case of capital budgeting plans.
• In order to avoid an adverse effect on the company’s future plan, capital investment decisions are to be taken carefully.
• To judge the project’s profitability, the involvement of forecasting of many years’ profits in advance is there with the making of coital budget plans.

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