How are project classifications used in the capital budgeting process?
To explain: The use of project classification in the process of capital budgeting.
Introduction:
Capital Budgeting:
It refers to the long term investment decisions that has been taken by the top management of a company and that are irreversible in nature. These decisions require investment of large amount of the company’s cash.
The uses of project classification in capital budgeting are,
Thus, the project classification in capital budgeting is helpful in determining the risk factor, actual time of the project and the actual workload involved in the project.
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