O'Reilly logo

Strategic Managerial Accounting – A Primer for the IT Professional by Gopal Saxena

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

CHAPTER 4

Capital Budgeting and Enterprise Risk Management

It’s clearly a budget. It’s got a lot of numbers in it.

—George W. Bush

Introduction

Every company requires funds to operate, and as funds do not come free, the company has to source them in the least expensive manner. Funds either come from shareholders as equity or can be borrowed from banks or private lenders. In each case, the party putting up the funds expects a minimum return on its investment—banks and debt holders expect interest while shareholders expect dividends or capital appreciation. This expectation, from the company’s perspective, is the cost of obtaining these funds, that is, the cost of debt or the cost of equity as the case may be. The weighted average of these two ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required