... competitor, technology, cash flow, environmental uncertainties, finance, interest rate, industry context, etc. are necessary to be considered in making decision in capital budgeting. There is no doubt that the expenditures of an organization are made in respect of the expectation of realizing future benefit. Nevertheless, considerable care should be taken when organization approaches long-term asset investment. It is because cost commitments of the funds for this significant period of time associated with assets in long-term investment create risk for an organization, since they used up a large proportion of firm's resources and finance to take this action that is deemed as irreversible once it starts. Alternatively, they remain even if the asset doesn't guarantee the anticipated profits and benefits. As a result, the finance flexibility of the organization would be reduced. However, capital budgeting, which is a systematic approach, to evaluate an investment in a long-term, or capital, asset. This is ...

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