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Capital budgeting is a multi-step process employed by enterprises or companies to
determine if an investment or project is worthwhile. It is comprised of five crucial steps:
identifying and evaluating potential investments or projects; estimating the costs involved in the
operation and implementation of the feasible investment opportunity identified; estimating the
cash flow of the investment or project chosen; assessing the risks associated with the investment;
and implementing the project (Lakew, 2017). Out of these steps, identifying and evaluating
potential investments or projects is the most critical step in capital budgeting. This step is very
critical because the promoter has to explore available opportunities and identify the mo...
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