The ultimate goal of capital budgeting is to determine the effect of a project on the firm's cash flows and the consequences of accepting or rejecting a project for the firm's value.

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Capital budgeting involves analyzing potential investment opportunities in order to determine their impact on a company's cash flows and ultimately, its overall value. The goal is to make informed decisions about whether to invest in a particular project or not based on its potential financial outcomes.

The Ultimate Goal of Capital Budgeting Is to Determine the Effect