What is Capital Budgeting?

Answer Posted / bindu

Capital budgeting (or investment appraisal) is the planning
process used to determine whether a firm's long term
investments such as new machinery, replacement machinery,
new plants, new products, and research development projects
are worth pursuing. It is budget for major capital, or
investment, expenditures.[1]

Many formal methods are used in capital budgeting,
including the techniques such as

Accounting rate of return
Net present value
Profitability index
Internal rate of return
Modified internal rate of return
Equivalent annuity

Is This Answer Correct ?    7 Yes 0 No



Post New Answer       View All Answers


Please Help Members By Posting Answers For Below Questions

EXPAND_________SEAMEC

1536


What type of question generally asked in Brokerage Firm ?

2386


We are running an educational institution in Karnataka,India. Is there any ceiling stating that if gross salary is upto this then only incentive or bonus can be paid?

1594


what is Contra Asset?

11398


what is corporate accounting?

1554






EXPAND___________NBFCS

1603


Expand---------MNOP

1575


how can make configration related with electronic bank statment and how can i upload bank statment to system

1564


Hi, I would like to check if my understanding is correct I have a negative amount for provision of income tax in my balance sheet from my previous financial year.What are the accounting treatments for income tax paid and then refunded to you for the current year? Is this correct? For payment Dr provision of income tax cr bank For tax refund Cr provision of income tax Dr bank Do I need to input anything in income tax expense acct?

1256


Short answer on _______Amendment

1484


Mr. X buys an asset of Rs. 1000/- in cash and with it get an free gold coin what is the general entry for this?

1466


What is the important of cash in a business unit

1510


How to Calculate Mortgage?

1874


What is the working formula for Working Capital Turnover

1650


What is compensation theorem?

2494