Capital Budgeting: the process of planning for purchases of long-term assets. example Our firm must decide whether to purchase a new plastic molding machine for $127,000 how do we decide? Will the machine be profitable? Will our firm earn a high rate of return on the investment The relevant project information follows:Capital Budgeting: the process of planning for purchases of long-term assets. • example: Our firm must decide whether to purchase a new plastic molding machine for $127,000. How do we decide? • Will the machine be profitable? • Will our firm earn a high rate of return on the investment? • The relevant project information follows: