What is capital budgeting concerned with?

Capital budgeting is primarily concerned with the process of planning and managing a firm's long-term investments. This involves evaluating potential major expenditures or investments, such as purchasing new equipment, launching new products, or investing in real estate. The objective is to determine the most effective allocation of resources to projects that will yield the highest returns over time and align with the firm's long-term strategic goals.

In this context, capital budgeting requires thorough analysis to assess the viability and risks associated with potential investments. It typically involves techniques such as net present value (NPV), internal rate of return (IRR), and payback period calculations to guide decision-making.

The other options focus on different aspects of financial management, such as day-to-day expense management, current market analysis, or budgeting for salaries, which do not fall under the core functions of capital budgeting.