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What are the merits and demerits of Capital Budgeting?

by Guest5701  |  12 years, 7 month(s) ago

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What are the merits and demerits of Capital Budgeting?

 Tags: budgeting, Capital, demerits, merits

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  1. Guest6460
    Capital budgeting is all about long term planning for capital purchase. you raise long term funds and decide how the funds will be used, normally the funds are used towards purchasing major fixed assets.  some times current assets will also benefit from long term budgeting for exmaple a better distribution system may need a new warehouse and more inventories.  

    Capital buget allows you to make large possible profits
    risk is higher
    it takes a long while for the returns

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