What is the main purpose of cost estimation in capital planning?

The main purpose of cost estimation in capital planning is to predict project costs and inform funding needs. Accurate cost estimation is critical for effective capital planning because it allows organizations to anticipate the financial resources required for a project before it begins. By understanding the projected costs, decision-makers can make informed financial plans, secure necessary funding, and allocate resources appropriately.

In capital planning, cost estimations help to develop budgets, evaluate project feasibility, and prioritize projects based on available funds. This prediction can also influence the timing and scale of projects, ensuring that financial commitments are aligned with organizational goals and capacity.

The other options, while relevant to project management and planning, do not encompass the primary role of cost estimation in capital planning. They address different aspects of project management, such as marketing, performance evaluation, and scheduling, rather than the financial foundation that cost estimation provides.