This paper is devoted to a discussion of the principles and techniques of capital expenditure decisions Capital expenditure decisions pertain to fixed/ long term assets which refer to assets which are in operation and yield a return, over a period of time, usually exceeding one year. The need and urgency of capital expenditure arises due to several factors like growth in the size and scale of the enterprise, promotion of new and improved products, expenditure on research and innovations, the need to fight cut-throat competition, cost reduction program, carrying out special campaigns, and requirement for safety etc. With the increase in mechanization and automation, capital expenditure decisions are often large and are more or less permanently blocked in the investment. They are, therefore, long term investment decisions or capital budgeting decision. They are irreversible decisions and are taken by the top management. The long term capital expenditure budget become an instrument of the long term policy of the enterprise.