17

Principles of Capital Budgeting

“Money is like manure. You have to spread it around or it smells.”

 

J. Paul Getty

LEARNING OBJECTIVES

After reading this chapter, you will be able to:

  1. Understand the basic concepts of capital investment decisions.

  2. Discuss the characteristic features of capital investment decisions.

  3. Understand the steps involved in assessing and evaluating capital investment decisions.

  4. Look at the different types of projects that constitute capital investments.

FINANCE IN PRACTICE

Andhra Pradesh Rayons (APR) Limited was promoted by Ballarpur Industries Limited (BILT) in 1975. At that time, there were only three rayon grade pulp plants in India. APR entered into the business and projected a constant increase in demand ...

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