Capital budget essay
Simple Capital Budgeting involves: •Evaluating proposals for capital projects that are strategic to the company's overall objectives. •Estimating and evaluating the incremental after-tax cash flows for each of the investment proposals. •Selecting an investment proposal that maximizes returns for investors. Capital budgeting, however, discounts expected cash flow estimates. An important principle to apply when budgeting capital is the time value of money. This means that a year is worth more than a year. This comes from risk, inflation and opportunity costs. Why in News. The Union Finance Minister recently presented it to Parliament. The central theme of the budget – “Ease of living for all citizens” was based on three prominent themes: Ambitious India – better living standards with access to healthcare, education and better jobs for all sections of society Economic,