Everything you need to know about the techniques and methods of capital budgeting. Capital Budgeting or Investment Decisions or Capital Expenditure Decisions may be defined as a firm's decision to invest its current funds most efficiently in the long term assets in anticipation of an expected flow of series of years. Such decisions are very important for a firm, since [...]
In this article we will discuss about:- 1. Meaning of Capital Budgeting 2. Need for Capital Budgeting 3. Process 4. Classification. Meaning of Capital Budgeting: Capital budgeting is the process of making investment decisions in capital expenditure. Capital expenditure is an expenditure, the benefits of which are expected to be received over a period of time exceeding one year. Some [...]
The survival of a business depends upon management's ability to conceive, analyze, and select investment opportunities that are profitable. The firm must select such projects that maximize the returns of the business. Capital budgeting is the allocation of available resources to various proposals. It involves estimation of cost and benefits of a proposal, estimation of required rate of return and [...]