Capital Budgeting refers to:
APlanning for long-term investment in capital assets
BAnnual budget preparation
CShort-term inventory budgeting
DCash management
Answer & Solution
Correct answer: A. Planning for long-term investment in capital assets
1. Capital Budgeting = process of evaluating long-term investment proposals.
2. Focus on projects expected to generate cash flows over many years.
3. Crucial because decisions are largely irreversible.
_Source: ICAI BoS CA Inter Paper 6A, Ch 7 "Investment Decisions", §1 & §2_