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    Capital Budgeting Decision

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    Sneha Kumar
    Capital budgeting is the process of evaluating long-term investment projects to select those that maximize investor wealth. It involves analyzing projects with benefits extending beyond one year using techniques like net present value to determine economic and financial profitability. Capital budgeting decisions are important for businesses to choose proposals that provide the best long-term return meeting or exceeding investor requirements.

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    Capital Budgeting Decision

    Uploaded by

    Sneha Kumar
    49 views5 pages
    Capital budgeting is the process of evaluating long-term investment projects to select those that maximize investor wealth. It involves analyzing projects with benefits extending beyond one year using techniques like net present value to determine economic and financial profitability. Capital budgeting decisions are important for businesses to choose proposals that provide the best long-term return meeting or exceeding investor requirements.

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    Capital budgeting is the process of evaluating long-term investment projects to select those that maximize investor wealth. It involves analyzing projects with benefits extending beyond one year using techniques like net present value to determine economic and financial profitability. Capital budgeting decisions are important for businesses to choose proposals that provide the best long-term return meeting or exceeding investor requirements.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    49 views5 pages

    Capital Budgeting Decision

    Uploaded by

    Sneha Kumar
    Capital budgeting is the process of evaluating long-term investment projects to select those that maximize investor wealth. It involves analyzing projects with benefits extending beyond one year using techniques like net present value to determine economic and financial profitability. Capital budgeting decisions are important for businesses to choose proposals that provide the best long-term return meeting or exceeding investor requirements.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 5

    CAPITAL BUDGETING

    DECISION

    Capital budgeting is the process of evaluating and selecting


    long-term investments that are in line with the goal of
    investors wealth maximization.

    The expected benefits generally extend beyond one year in the


    future. Out of different investment proposals available to a
    business, it has to choose a proposal that provides the best
    return and the return equals to, or greater than, that required by
    the investors.

    The capital budgeting decisions are important, crucial and


    critical business decisions

    OBJECTIVES

    OF

    STUDY

    To understand the concept of Capital Budgeting

    To understand the purpose of capital budgeting.

    To know the process of capital budgeting

    To know the different techniques of capital budgeting.

    To know the various capital budgeting decisions

    RESEARCH METHODOLOGY

    To determine the merits of an investment project

    To determine the long-term economic and financial


    profitability of any investment project.

    To analyze the economic viability of a business project lasting


    multiple years and involving capital assets.

    To help make decisions that is smart for business.

    OBSERVATION
    The companies in India do have specific amount of average size
    of annual capital budget and all project size requires formal
    quantitative analysis.
    The companies under study in India seem to be planning one year
    in advance only but here also the period of planning is different for
    different projects.
    This may be due to volatile business environment. The authority
    to take final capital budgeting decision rests with the chief finance
    officer and top management officials of all the organizations under
    study.
    The responding firms ranked payback period as the most important
    technique followed by internal rate return and net present value. \

    CONCLUSION AND
    SUGGESTIONS

    Capital budgeting methods differ on the basis of nature and size


    of a particular project under consideration.

    After analysing every aspect of capital budgeting including the


    process, techniques, decision involved in choosing the
    technique we can conclude that it is one of the most important
    decision for the working of the company .

    The net present value method, a business estimates all the cash
    flows pursuing a project, now and in the future. It then adjusts,
    or "discounts," the value of future cash flows to reflect what
    they're worth in the present day. It makes this adjustment using
    a "discount rate" that takes into account inflation, the risk of the
    project and the cost of capital

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