FM-Capital Budgeting Procedures.docx - Capital Budgeting...

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Capital Budgeting ProceduresCapital budgeting is the evaluation of proposed investment projects involving capital expenditure. Capital budgeting is the process which is used to decide whether the investment project should be undertake or reject. Capital budgeting is the most important decision of the financial management. A right decision can maximize the shareholder value of the company which is the primary objective of a company. The capital budgeting procedures consists of six steps.The first step of capital budgeting procedure is initial investigation of the proposal. In this step company need to generate a proposal of investment and make a decision whether the project is technically feasible and commercially viable of the company[ CITATION Edu15 \l 1028 ]. The foundation of accepting or rejecting of the proposal is formally reviewed for two reasons which are assess the risks of the investment and deciding whether the investment is assess the appropriateness in light of the company’s objectives and strategic which is based on the SWOT

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