Every organization has a capital Budgeting system. That means it’s a process that is followed to decide on which capital project funds should be invested. This is one of the toughest decisions for them. Planning plays very important part in this process. Without proper planning the decision can be made wrong. Many organizations face gap among the identified needs and the available resources in order to meet their needs. Therefore; to complete this gap, it becomes very important for them to make and evaluate the strategies for increasing revenues available for funding in Projects. This whole planning for project is called as Project Planning.
Capital budgeting is the process to determine whether the long term investments of any firm or organization that they are using are worth having it or not. When firm decides to invest its current funds in the long term assets hoping flow of benefits over series of years, it is called as Capital Budgeting.
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