Capital budgeting is a crucial internal process that companies typically undertake to make informed decisions about long-term investments. This process allows for the evaluation of the profitability and potential benefits of various investment projects. A review of the literature indicates that the most commonly used methods in capital budgeting are Net Present Value (NPV), Payback Period (PBP), and Internal Rate of Return (IRR). These methods enable companies to quantify future cash flows and compare them against initial investments to make decisions that maximize their economic returns. This paper provides a detailed examination of the application of these three most common methods, including their specific characteristics and procedures. It concludes that each of these methods has its own advantages and disadvantages, which can affect investment decisions. Due to these variations in effectiveness and accuracy, practice often necessitates the use of a combination of different capital budgeting methods to obtain a comprehensive and balanced view of investment viability.