Capital Budgeting is the process of planning and evaluating expenditures on assets whose cash flows are expected to extend beyond one year. The process of budgeting resources for the future of an organization’s long term plans. That is, the investment decision that will provide benefits to the firm for longer than one year and will help the firm to maximize its long-term goal wealth maximization. These types of decisions are basically concerned with real assets. Real assets are those help in producing goods or providing services directly or indirectly.