Capital Budgeting

W. Armand Layne
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W. Armand Layne: University of the West Indies

Chapter Chapter 16 in Cost Accounting, 1984, pp 276-283 from Palgrave Macmillan

Abstract: Abstract Capital budgeting techniques provide business managers with criteria for sinking scarce money into capital projects. Capital projects include buildings, land, vehicles or other socially desirable project. Such assets are important to the firm,1 because the firm’s profits (and its continuity in business) is derived from their use. The firm’s future development also rests on (i) selection of capital projects; (ii) their replacement, when the projects are outdated through technology or obsolescence; (iii) discarding of previously accepted projects which are no longer attractive to the firm. When the firm’s management invest in capital projects, it does so with the understanding that the service benefit to be obtained will last for a lengthy period of time.2

Keywords: Interest Rate; Cash Flow; Capital Expenditure; Cost Account; Capital Budget (search for similar items in EconPapers)
Date: 1984
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-17691-5_17

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DOI: 10.1007/978-1-349-17691-5_17

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