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The capital budgeting process provides a framework for evaluating the feasibility of
various alternative investment projects with the aim of identifying those that align with the profit
maximization goals and risk appetite of an organization (Bracker et al., n.d.). Several concerns
and limitations are likely to arise at each of the six phases of the capital budgeting process. At
phase 1, disagreement the brainstorming process may stall or experience protracted delays as
various corporate executives put their ideas of capital projects on the table. Some may be too
rigid to let go of their ideas even when their relevance is overshadowed by better ideas. This
situation can especially arise when an executive has a personal interest in a potential project.
Phase 2 is likely to be beleaguered by the challenges of gathering accurate data on the capital
project ideas fronted by different executives and manager. Again, disagreements in on which
capital projects to prioritize may arise among managers and executives. The structure of an
organization could encourage executives and managers to view one another as competitors,
which would make reaching consensus on the projects that should be prioritized difficult.
Phase 3 faces a unique challenge. The commonly used analysis to...
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