Capital Budgeting and Valuations

Capital Budgeting and Valuations involve the strategic process of assessing and analyzing investment opportunities to make informed financial decisions. It primarily focuses on allocating and evaluating financial resources effectively for long-term projects, such as acquiring assets, expanding operations, or launching new ventures. Capital budgeting helps determine the feasibility and profitability of such investments by estimating potential cash flows, considering risk factors, and applying relevant valuation techniques. By considering factors like cost of capital, payback period, net present value, internal rate of return, and profitability index, capital budgeting ensures optimal allocation of funds, maximizing shareholder value and facilitating informed decision-making in an organization's capital investment projects.