Capital budgeting is the procedure a firm uses to plan its cash flow strategy for the next year.

Question

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Capital budgeting is the process a firm uses to evaluate and select long-term investment projects, such as purchasing new equipment or expanding facilities, based on their potential for profitability and return on investment. It is not focused on planning cash flow for the next year alone, but rather making strategic investment decisions that will impact the company's financial future.

Capital Budgeting Is the Procedure a Firm Uses to Plan