It is used to asses whether mine a firm's long term investments such as machinery, replacement of machinery, new plants, new products, and research development projects are worth the funding through the firm's capitalization structure. If they provide returns above required return then they shall be funded. Also capital budget determines how much to allocate between different expense?

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The term youre referring to is capital budgeting Capital budgeting is the process by which a company ... View the full answer