Capital Budgeting is the process of evaluating and allocating funds for long-term investments. It involves identifying, analyzing, and ranking projects based on their financial benefits and risks. To determine which projects are most profitable in the long run, businesses evaluate potential returns and costs over multiple years. This helps organizations allocate resources more effectively and make smarter decisions about where to invest their capital. Capital Budgeting can help organizations maximize profits while minimizing risk – making it an essential tool for any business.