1.Capital budgeting is the process that is undertaken by the business to evaluate any major investment or a project like construction of the new building, acquiring new machinery, etc (Michelon et al., 2020). The purpose of capital budgeting is to assess whether the cash flow produced by the project exceeds the cost of the project. 2.Capital expenditure is the expense that is incurred by the company for the acquisition, up-gradation, and maintenance of physical assets. Capital expenditure refers to the expenditure on an asset that is expected to have a useful life of more than one accounting period like building, machinery, etc. 3.Operational expenditure is the money that is spent by the company in the day-to-day ongoing running of the company or business (O’Connor et al., 2013). They are the short-term expenses that are reported in the same accounting period in which they are incurred. Examples include wages, stationery expenses, Repair, maintenance, etc.