 Investment decisions and capital budgeting practices in German manufacturing companiesDennis Schlegel, Franziska Frank and Bernd Britzelmaier International Journal of Business and Globalisation, 2016, vol. 16, issue 1, 66-78 Abstract: This paper aims to explore the methods and techniques that are used to make investment decisions in German manufacturing companies. It intends to investigate whether the behaviour of companies is in line with finance and management accounting theory. Based on a literature review taking into account specifics of German management accounting techniques, a survey instrument was developed. It includes questions on both investment appraisal methods and cost-of-capital. The questionnaire was administered in a web-based survey with a final sample size of 65 companies from the manufacturing sector in Germany. It is found that the net present value (NPV) technique is the most prominent method applied by the sample companies. Moreover, significant differences between companies of different sizes are identified. In smaller companies, single period methods such as cost comparison are more popular whereas larger companies tend to use multi-period methods. Keywords: capital budgeting; internal rate of return; IRR; net present value; NPV; discounted cash flow; DCF; cost-of-capital; hurdle rate; investment decisions; Germany; manufacturing industry; management accounting; firm size; cost comparison. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbglo:v:16:y:2016:i:1:p:66-78 Access Statistics for this article More articles in International Journal of Business and Globalisation from Inderscience Enterprises Ltd |
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