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    Finance Abstract

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    utsav
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    Finance Abstract

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    utsav
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    121

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    121

    Copyright:

    © All Rights Reserved
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    Download as docx, pdf, or txt
    16 views1 page

    Finance Abstract

    Uploaded by

    utsav
    121

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    CAPITAL BUDGETING

    Capital budgeting refers to the process we use to make decisions concerning investments in
    the longterm assets of the firm. The general idea is that the capital, or long-term funds, raised
    by the firms are used to invest in assets that will enable the firm to generate revenues several
    years into the future. Often the funds raised to invest in such assets are not unrestricted, or
    infinitely available; thus the firm must budget how these funds are invested.

    Importance of Capital Budgetingbecause capital budgeting decisions impact the firm for
    several years, they must be carefully planned. A bad decision can have a significant effect on
    the firms future operations. In addition, the timing of the decisions is important. Many
    capital budgeting projects take years to implement. If firms do not plan accordingly, they
    might find that the timing of the capital budgeting decision is too late, thus costly with
    respect to competition. Decisions that are made too early can also be problematic because
    capital budgeting projects generally are very large investments, thus early decisions might
    generate unnecessary costs for the firm

    Pay Back Period (PBP) : The pay back period (PBP) is the traditional method of capital
    budgeting. It is the simplest and perhaps, the most widely used quantitative method for
    appraising capital expenditure decision.

    REESEARCH METHODOLOGY- The researcher is using the primary data by collecting


    the Balance sheet of 5 different companies. The researcher has selected 5 Cellular companies
    such as idea, BSNL, Bharti Airtel, Relience and MTNL. The researcher will be using the
    traditional method so as to get the accurate results.

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