Capital Budgeting

Capital Budgeting ,[object Object],[object Object],[object Object]

Decision practices ,[object Object],[object Object],[object Object],[object Object]

Types of Projects ,[object Object],[object Object],[object Object]

Stages in Capital Budgeting Process ,[object Object],[object Object],[object Object],[object Object]

Capital budgeting decision methods ,[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],Decision-making Criteria in Capital Budgeting

[object Object],[object Object],[object Object],[object Object],Decision-making Criteria in Capital Budgeting

[object Object],[object Object],Payback Method

[object Object],(500) 150 150 150 150 150 150 150 150 Payback Period 0 1 2 3 4 5 8 6 7

[object Object],Payback period = 3.33 years. Payback Method 0 1 2 3 4 5 8 6 7 (500) 150 150 150 150 150 150 150 150

[object Object],[object Object],[object Object],Drawbacks of Payback Method

[object Object],[object Object],[object Object],[object Object],Discounted Payback

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Other Methods

[object Object],Net Present Value NPV = - IO ACF t (1 + k) t n t=1 

Net Present Value ,[object Object],[object Object],[object Object]

Profitability Index NPV = - IO ACF t (1 + k) t n t=1 

t Profitability Index NPV = - IO ACF t (1 + k) t n t=1  PI = IO ACF t (1 + k) n t=1 

Profitability Index ,[object Object],[object Object],[object Object]

[object Object],Internal Rate of Return (IRR) n t=1  IRR: = IO ACF t (1 + IRR) t

IRR ,[object Object],[object Object],[object Object]

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