Understand Deficiencies of Capital-Budgeting Techniques before Applying Them to Planning

Capital budgeting applies to investments that will yield capital returns over a number of years. Capital budgeting is important to a company when a large cash outlay is involved for long term investment in a project. Marketing decisions are now employing capital budgeting. There are several capital quantitative budgeting alternatives that marketers can choose from. Some guidelines for employing capital budgeting in decision making for long term plans include: setting a low discount rate, employing a sequential procedure, and, employing a mix of methods.