Everything you need to know about capital budgeting methods. Some of the capital budgeting methods are:- 1.Traditional Methods 2.Modern Methods 1. Traditional methods includes: a.Payback Period Method (PBP) and Its Variants - Post back period, Post payback profitability method, Discounted payback period b.Accounting Rate of Return Method (ARR) 2. Modern methods includes: a.Net Present Value (NPV) b.Profitability Index (PI) or [...]
Capital budgeting is a process which helps enterprises in examining the financial implications of the long term investment projects. The decision of accepting or rejecting an investment project as part of a company's policy depends upon the investment rate of return that such a project will generate. Capital budgeting is the process of evaluating and selecting investments in capital assets [...]
Working capital refers to short-term funds that are needed to meet operating expenses. To quote Ramamoorthy, "It refers to the funds, which a company must possess to finance its day-to-day operations". It is concerned with the management of the firm's current assets and current liabilities. It relates to the problems that arise in attempting to manage the current assets, current [...]