Either increase the revenues or reduce the costs.
Kinds of capital budgeting.
1 accept reject decisions.
Let us make an in depth study of the kinds and planning period of capital budgeting decisions.
A capital budgeting has long term implications.
Toady we will discuss the different types of capital budgeting.
The process involves analyzing a project s cash inflows and outflows to.
The crux of capital budgeting is profit maximization.
Reducing costs means representing obsolete return on assets.
Capital budgeting is used by companies to evaluate major projects and investments such as new plants or equipment.
The increase in revenues can be achieved by expansion of operations by adding a new product line.
The most significant reason for which the capital budgeting decisions is taken is that it has long term implications i e.
Its effects will extend into the future and will have to be endured for a longer period than the consequences of current operating expenditure.
It includes all those projects which compete with each other in a way that acceptance of one precludes the acceptance of other or others thus some technique has to be used for selecting the best among all and eliminates other alternatives.
Capital budgeting decision is a simple process in those firms where fund is not the.
Kinds of capital budgeting decisions.
There are two ways to it.