Principle objective of this article is to Define and Discuss on Capital Budgeting. Capital budgeting is a process of planning expenditures incurred on assets whose cashflow is expected to range beyond one year. In other words, it is described as a process that requires planning for setting up budgets on projects required to have long-term implications. It may be used for processes such as the purchase of new equipment or launching of the new product in the market. Businesses prefer to intricately analyze a project before having it on, as it has a great impact around the company’s financial performance.