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Rahul Jain
Rahul Jain, Financial Advisor
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Experience:  BCOM(H), MBA, ACS
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what types of projects require more detailed analysis in the

Resolved Question:

what types of projects require more detailed analysis in the capital budgeting process?
Submitted: 8 years ago.
Category: Finance
Expert:  Rahul Jain replied 8 years ago.

The investment decisions of a firm are generally known as the capital budgeting, or capital expenditure decisions. The firm’s investment decisions would generally include expansion, acquisition, modernization and replacement of the long-term assets. Sale of a division or business (divestment) is also as an investment decision.

The capital budgeting has following characteristics:

The exchange of current funds for future benefits.

The funds are invested in long-term assets.

The future benefits will occur to the firm over a series of years.

Hence the projects which are of long term nature and above characterstics require detailed analysis in the capital budgeting processes.


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