Your cpu night be able to handle the work load and resulting file size but you should take into consideration the final artwork file size you'll be sending out for print. Bear in mind that during pre-press production, most of the data will be discarded.
Resolution is also based on the material it will be printed on as well as the "viewing distance" of the banner. For vinyl print, a resolution of 50dpi will suffice in most cases. For textile print, 75dpi will do.
Personally, my rule of thumb is to create a large sized artwork at a quarter of it's full size (in inches and set to CMYK) and at between 200 and 300dpi. This is said to be a play-safe setting but I find that this document size and resolution is a perfect balance between file size and image quality.
It's only for special jobs like Illuminated billboards or work that require a higher degree of image quality for "ultra-sized" billboard formats as required by the client that I will create the work at normal size and do the necessary math so's to achieve a workable file size with the needed resolution and quality expected by the client... 
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And don't make the mistake of up-sizing or increasing the resolution of a small image just so to accommodate the artwork's final size. You'll only end up with an uglier, fuzzy representation of the small image.
Everything could be done in Photoshop. But for crisp sharpness in text, logos and shapes, it's best to do or prepare these in a vector application like Illustrator or other vector applications. Images can be prepared in Photoshop. Finally, all these elements are combined in a layout application like Illustrator or with In-Design - linking in the raster and vector files and adding in text or extra details like color blocks.
