Bootable CDs are the CDs which contain a bare minimum Operating System (like DOS) in the First Sector of the CD ROM.
The boot files should be present in First Sector only, because BIOS hands over the control to the program residing in the first 512 bytes in the First Sector.
By making a CD as Bootable, you can start your Computer without the help of Computer's OS. For this you have to change the "First boot Device" option to CDROM in the BIOS.
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