Some of the more important steps involved in capital budgeting include environmental analysis, formulation of capital expenditure portfolio, project measurement and ranking, weighted average cost of capital and project approval.

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These steps are integral to the capital budgeting process, which involves evaluating and selecting long-term investments that are in line with the firm's goal of wealth maximization. Environmental analysis helps in understanding external factors, formulation of capital expenditure portfolio involves deciding on the mix of projects, project measurement and ranking prioritize projects based on certain criteria, the weighted average cost of capital is used to evaluate the cost of funding the projects, and finally, project approval is the step where decisions are made on which projects to implement.

Some of the More Important Steps Involved in Capital Budgeting