capital budgeting

Definition

The process of determining which potential long-term projects are worth undertaking, by comparing their expected discounted cash flows with their internal rates of return.

Use capital budgeting in a sentence

You should try to be good at capital budgeting so that you know exactly where your money will go to.

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The capital budgeting exercise was useful in providing detailed information that is helpful in making the best decisions possible for us.

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Mary came to the capital budgeting meeting prepared; she was sure she could convince the partners virtual vacations were going to be the next big trend.

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cutoff point budget