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capital budgeting
Title: capital budgeting
Category: Literature / English
Details: Words: 2739 | Pages: 11.7 (approximately 235 words/page)
capital budgeting
CAPITAL BUDGETING
Capital Expenditures
A expenditure that generates a cash flow benefit for more than one year is called a capital expenditure. Some examples include the purchase of new equipment, expansion of production facilities, buying another company, acquiring new technologies, or launching a research & development program. A capital expenditure involves large cash outlays with implications on future values of a company. Once committed to making a capital expenditure it is sometimes difficult to back out. …showed first 75 words of 2739 total…
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…showed last 75 words of 2739 total…of financial management. Three good economic criteria are Net Present Value, Modified Internal Rate of Return, and Discounted Payback.
People need to manage project risk differently than we would manage uncertainty. We have several tools to help us manage risks, such as increasing the discount rate. We also need to implement post analysis and tracking of projects after we have made the investment. This helps eliminate errors in the capital budgeting process.
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