A capital expenditure proposal is a formal request to undertake projects to acquire or upgrade physical assets. The proposed projects will be ranked according to criteria like payback period, discounted payback method, net present value, and internal rate of return. There are different types of investment proposals such as mutually exclusive, contingent, and independent proposals as well as replacements. Key principles for capital expenditure proposals include carefully estimating costs, finding profitable opportunities, estimating future revenues and expenses, considering non-monetary factors, screening and selecting projects, and preparing necessary reports.