Answer:-
To prepare a capital budgeting analysis, start by identifying potential investments, like equipment, expansion, or new projects. Estimate initial costs, including purchase price, installation, and related expenses. Next, forecast future cash flows the investment will generate. Use methods like Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period, and Profitability Index to evaluate profitability. Assess risks, market conditions, and financing options to ensure feasibility. Compare different projects and prioritize those with the best financial return. A well-prepared analysis helps businesses make informed investment decisions and maximize long-term growth.a
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