Explain the concept of project sustainability and its relevance in capital budgeting.

Explain the concept of project sustainability and its relevance in capital budgeting.

Project sustainability refers to the ability of a project to maintain its economic, social, and environmental benefits over the long term. In capital budgeting, project sustainability is relevant because it helps decision-makers assess the long-term viability and profitability of a project. By considering the potential impacts on the environment, society, and the economy, capital budgeting can ensure that projects are not only financially feasible but also aligned with sustainable development goals. This approach helps to minimize negative externalities, promote responsible resource allocation, and ensure the long-term success and value creation of the project.