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The process of evaluating the expenditures or investments which are considered to be significant in number is referred to as capital budgeting. It mainly constitutes the decision to be taken to invest the current funds for addition modification disposition or replacement of fixed assets. It is a tool used to maximize the future profit of an organization. There are challenges faced by the organization in the selection of two projects or investments and buy or replace decision. Capital budgeting is mainly the process of planning the benefit and expenditure and then deciding on whether to invest or not on a particular project due to investment possibilities which not be much rewarding.
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