Critical evaluation of capital budgeting techniques

Divya Gupta and R.P. Mohanty

International Journal of Accounting and Finance, 2012, vol. 3, issue 4, 308-319

Abstract: Capital budgeting is mainly related to long term capital decision of a company and each company adopts a different technique for taking capital investment decision. With the help of this review paper, we have tried to find out the most popular and least popular techniques used by companies in different sectors for decision making in case of capital investment. In this review paper, we have reviewed few of the issues of capital budgeting discussed in various research articles like degree of usage of discounted cash flow techniques (DCF), inconsistency in theory and practice related to capital budgeting decision making, differences in implementing decisions for small and large firms, cost of capital and risk analysis in capital budgeting.

Keywords: capital budgeting; capital investment; cost of capital; risk assessment; DCF techniques; discounted cash flow; decision making. (search for similar items in EconPapers)
Date: 2012
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