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Answer Posted / sanmilan
Capital Budgeting is a Testing Tool or Decision making tool
to analyze the viability of any Particular Project with
respect to the Cash Outs and Inflows. It plays a vital role
in Decision Making. In simple words, It gives answers for
how much to Invest, on what stages, when the investments can
be realized with profits with the help of Managerial tools
like IRR,Pay Back Period Calculations etc.
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One car company raised an invoice of 30k to its customer, which includes car's price and one year service price of 1600 (cost). They work on 25% margin. How much amount will go to Income statement and B/S?
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