Chapter10Capital Budgeting Cash Flows
Capital budgeting is the decision-making process used by companies to evaluate long-term investments in large capital assets. It also covers decisions to acquire other firms, either through the purchase of their common stock or through the purchase of a group of assets that can be used to conduct an ongoing business. Capital budgeting describes the firm’s formal planning process for the acquisition and investment of capital and results in a capital budget that is the firm’s formal plan for the expenditure of money to purchase fixed assets.
Organizations make investment decisions within the framework of a strategic vision that should be leading the organization to achieve financial goals. The framework for ...
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