Question

What are examples of capital budgeting?

Answer #1

**Capital Budgeting** - It is Decision making
process releted to investment in long term projects.

**Examples of Capital Budgeting -**

- Payback period - It shows in which year the company is recovered its cost
- Discounted Payback period - It shows no of years to takes break even by discounting future cashflow.
- NPV = Pv of inflow - Outflow
- IRR = It is the interest rate at which NPV of the Project is Zero.
- Profitability Index
**NPV = Pv of inflow - outflow**

PV of inflow is calculated on excel by formula-

**=PV(rate,nper,pmt,fv)****IRR is to be calculated in excel by formula**

=IRR(values,[guess])

Profitability Index = Pv of Total inflow / Outflow

**Note - In Simple payback period future cashflow is not
discounted.**

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What are some examples of capital budgeting 300 words

1.
Define the net investment for a capital budgeting project. What is
included in a capital budgeting project’s net investment?
2. Capital budgeting projects can be classified according to
the purpose of the project. List and explain the three categories
for classifying projects according to their purpose.
3. The impact of indirect effects of a capital budgeting
project should be included in cash flow estimation. Give some
examples of indirect effects, and explain why they are important
and should be...

what is Capital Budgeting? DESCRIBE ALL THE CAPITAL
BUDGETING TECHNIQUES?

What is the reason that companies should use different capital
budgeting techniques, namely discount rate calculation models, for
domestic and international projects? Give examples from the AES
case.

1. Lexi, Lauren and Madeleine are having a discussion. “Capital
budgeting is designed to select projects that cost the least,” said
Lexi. “No”, said Lauren, “capital budgeting is about lowering
operating expenses to enable efficiency.” “You are both wrong,”
said Madeleine. “Capital budgeting is about – practically speaking
– allowing mangers to keep their jobs.” What do you think? Is Lexi
right? Is Lauren right? Is Madeleine right? Are none of them
correct? Support your answer with examples, as appropriate.

What is the primary "most important" capital budgeting
procedure? Why?

what implications on capital budgeting there may be of an
inappropriately estimated WACC.

the capital budgeting process

Capital budgeting decisions are risky. For this discussion
question: Research the risks associated with capital budgeting and
identify the three that you believe are the most significant risks.
Describe these risks and support your assertion with specific
reasons.

In taking capital budgeting decisions, financial
managers are advised to use more than one capital budgeting
technique for consistency, reliability and accuracy in capital
budget decisions. Although the Net Present Value (NPV) capital
budgeting technique is required in most capital budgeting
discussion processes, it may sometimes have conflicting decision
with Internal Rate of Return (IRR) under certain conditions.
Briefly state the conditions under which NPV and IRR results in
conflicting decisions and how the financial manager can resolve
this conflict?

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