Capital Budgeting Analysis
Capital budgeting involves selecting projects that add value to the firm. This may include a company's inadequate production capacity, or insufficient equipment. Capital budgeting decisions are important because they continue over extended periods of time. This may include fixed asset expenditures, such as land acquisition, new equipment and vehicle purchase, or retiring and replacing old machinery, or plant construction. This may also include revenue expenditures used for maintenance and repairs of fixed assets.