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Answer Posted / ammu
Capital budgeting is a required managerial tool. One duty
of a financial manager is to choose investments with
satisfactory cash flows and rates of return. Therefore, a
financial manager must be able to decide whether an
investment is worth undertaking and be able to choose
intelligently between two or more alternatives. To do
this, a sound procedure to evaluate, compare, and select
projects is needed. This procedure is called capital
budgeting.
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