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Management Accounting by Debarshi Bhattacharyya

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12

Capital Budgeting

LEARNING OBJECTIVES

On completion of the study of the chapter, you should be able to understand:

  • What is Capital Budgeting?

  • Features and importance of Capital Budgeting.

  • Different types of investments.

  • Different types of Capital Budgeting decisions.

  • Evaluation criteria of Capital Budgeting decisions.

  • Concept and determination of present value and discounted cash flow.

  • Different Capital Budgeting techniques.

12.1 CONCEPT OF CAPITAL BUDGETING

Capital Budgeting is the technique of long-term planning and analysis of outflows and inflows of funds relating to some investment objectives. It is the planning of capital expenditure which provides return over a number of years. According to Charles T. Horngreen, ‘Capital Budgeting ...

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