'Investment criteria is one of the factors

‘Investment criteria is one of the factors, which affect capital budgeting decision’. Comment.

Capital budgeting decision involves committing the finance on a long-term basis. This decision is very crucial since, it affects the earning capacity in the long-run.
The decision to invest in a particular project involves a number of calculations regarding amount of investment, rate of return, cash flow, etc. These calculations are necessary to evaluate the project for their selection.