Capital Budgeting
  1. Capital Budgeting: Introduction
  2. Capital Budgeting: The Importance Of Capital Budgeting
  3. Capital Budgeting: Evaluating The Desirability Of An Investment
  4. Capital Budgeting: Capital Budgeting Decision Tools
  5. Capital Budgeting: The Capital Budgeting Process At Work
  6. Capital Budgeting: Wrapping It All Up

Capital Budgeting: Introduction

All of us, at one time or another, have had to deal with either preparing or following a budget. In fact, many households manage their financial affairs through a budget. Businesses do the same thing through what is known as capital budgeting.

The process of capital budgeting is vital to any responsible, well managed business. If that business is public and owned by public shareholders, the budgeting process becomes more crucial, since shareholders can hold management accountable for accepting unprofitable projects that can have the effect of destroying shareholder value.

Capital Budgeting: The Importance Of Capital Budgeting

  1. Capital Budgeting: Introduction
  2. Capital Budgeting: The Importance Of Capital Budgeting
  3. Capital Budgeting: Evaluating The Desirability Of An Investment
  4. Capital Budgeting: Capital Budgeting Decision Tools
  5. Capital Budgeting: The Capital Budgeting Process At Work
  6. Capital Budgeting: Wrapping It All Up
RELATED TERMS
  1. Capital Budgeting

    The process in which a business determines whether projects such ...
  2. Initial Cash Flow

    The amount of money paid out or received at the start of a project ...
  3. Capital Project

    A long-term investment made in order to build upon, add or improve ...
  4. Capital Allocation

    A process of how businesses divide their financial resources ...
  5. Project Management

    The planning and organization of an organization's resources ...
  6. Project Finance

    Defined by the International Project Finance Association (IPFA) ...
RELATED FAQS
  1. How much debt is too much when calculating capital budgeting?

    Learn how companies determine how much debt is acceptable when funding a new project by using the net present value to estimate ... Read Answer >>
  2. How do you use internal rate of return to calculate a capital budget?

    Learn about how the internal rate of return is used in the creation of a capital budget along with net present value and ... Read Answer >>
  3. How do you use the profitability index rule when scoping out a project?

    Understand the parameters of the profitability index rule and how this rule is used in corporate capital allocation to determine ... Read Answer >>
  4. How do you use discounted cash flow to calculate a capital budget?

    Learn how discounted cash flows are used in creating capital budgets as a part of the net present value and internal rate ... Read Answer >>
  5. How do you calculate costs of capital when budgeting new projects?

    Discover how a company should estimate its costs of capital when budgeting for a new business project using the weighted ... Read Answer >>
  6. How do companies calculate the estimated duration of a new project?

    Learn about some of the common methods used by companies to estimate the duration of a new project, including those with ... Read Answer >>

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