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Managerial Economics
book

Managerial Economics

by Vanita Agarwal
January 2013
Intermediate to advanced
554 pages
18h 10m
English
Pearson India
Content preview from Managerial Economics

Chapter 13

Capital Budgeting and the Decision to Invest

After studying this chapter, you should be able to understand:

  • Capital budgeting is the process, which involves the planning of the capital expenditures in the various investment projects.
  • Capital budgeting or the planning of long-term expenditures is very crucial for a firm.
  • Capital budgeting can increase the value of a firm.
  • If the present value of the future cash flow from the project is smaller than the initial cost of the project, then the firm should not undertake the project.
  • The firm will determine its optimum stock of capital by producing at the level, where the marginal revenue productivity of capital equals the marginal cost of capital.
  • In deciding among two or more projects, ...
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Publisher Resources

ISBN: 9788131775622