Tag Archives | Capital Budgeting

Top 7 Investment Appraisal Techniques | Capital Budgeting

The following points highlight the top seven investment appraisal techniques. The techniques are: 1. Payback Period Method 2. Accounting Rate of Return Method 3. Net Present Value Method 4. Internal Rate of Return Method 5. Profitability Index Method 6. Discounted Payback Period Method 7. Terminal Value Method. Technique # 1. Payback Period Method: The payback […]

Capital Rationing: Meaning and Factors

In this article we will discuss about:- 1. Meaning of Capital Rationing 2. Factors Leading to Capital Rationing 3. Situations of Capital Rationing. Meaning of Capital Rationing: Capital rationing is a situation where a constraint or budget ceiling is placed on the total size of capital expenditures during a particular period. Often firms draw up […]

Non-Financial Factors in Capital Investment Decisions

In addition to the financial aspects of the capital investment decision there are also many other areas which warrant attention such as: Technical: (a) The need for technical superiority. (b) Flexibility and adaptability. (c) Ease of maintenance. (d) Operational considerations, e.g., need to restrain/recruit personnel. (e) Servicing arrangements. (f) Manuals provided for operating and servicing. […]

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