Capital Budgeting is very crucial for an organization to fulfill its objectives; in fact, it generates revenue and ensures long term existence of the organization. Even the entities which exist not for profit are also required to make investment decision though not to earn profit but to fulfill its mission. It is necessary that each rupee raised is to be invested in a very prudent manner. It requires a proper planning for capital, and it is done through a proper budgeting. A proper budgeting requires all the characteristics of budget. Due to this feature, investment decisions are very popularly known as Capital Budgeting, which means applying the principles of budgeting for capital investment. This is applicable for May 22, Nov 22 exams.