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Answer» Capital BUDGETING limitations are as follows:-
- It has long term implementations which can't be used in short term and it is used as operations of the business. A wrong decision in the early stages can affect the long-term survival of the company. The operating cost gets increased when the investment of fixed assets is more than required.
- Inadequate investment makes it difficult for the company to increase it budget and the capital.
- Capital budgeting involves large number of funds so the decision has to be TAKEN carefully.
- Decisions in capital budgeting are not modifiable as it is hard to locate the market for capital goods.
- The ESTIMATION can be in respect of cash OUTFLOW and the revenues/saving and costs ATTACHED which are with projects.
Capital budgeting limitations are as follows:-
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