Capital Budgeting Appraisal Methods

The Present Chapter

It discusses in detail the different techniques of capital budgeting appraisal used by the business enterprises for evaluating a capital project.


Capital investment evaluation is a very important task as the success of a project is based on its evaluation results. There are various techniques which are used to evaluate the project, comprising based on time value and not based on time value.

A good capital budgeting technique should consider all cash flows to determine the true profitability of the project and rank the projects according to its true profitability.

Capital budgeting techniques are grouped in the following two categories:

(a)   Capital budgeting techniques ...

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