identify and explain importance of capital budgeting? what the purpose of capital budgeting?

Capital budgeting
The term capital budgeting refers to the decisions relating to proposed long term capital outlays.
It is a formal process undertaken by the firm to efficiently invest funds in long term activities in
anticipated of expected flow of future benefits over a number of years. The capital budgeting
decisions have enormous impact on the basic character of the firm on a long term basis. The
basic features of capital budgeting decisions are:
- Current funds are exchanged for future benefits
- Investment in long term activities
- Future...