This document discusses the capital budgeting decision process. It describes the key steps as: 1) proposal generation, 2) review and analysis, 3) decision making, 4) implementation, and 5) follow up. It also defines some basic terminology used in capital budgeting, such as independent vs. mutually exclusive projects, unlimited funds vs. capital rationing, accept-reject vs. ranking approaches, and conventional vs. nonconventional cash flows. The overall goal of capital budgeting is to evaluate and select long-term investments that maximize owner wealth.