USING CAPITAL BUDGETING TECHNIQUES IN RATIONALIZING CAPITAL EXPENDITURE DECISIONS IN JORDANIAN INDUSTRIAL PUBLIC SHAREHOLDING COMPANIES

Abdallah Atieh (), Malik Muneer Abu Afifa () and Shadya Al-Manaseer
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Abdallah Atieh: Faculty of Business, Al-Zaytoonah University of Jordan, Amman – Jordan
Malik Muneer Abu Afifa: Faculty of Business, Al-Zaytoonah University of Jordan, Amman – Jordan
Shadya Al-Manaseer: Social Security Corporation, Amman – Jordan

Economics and Management, 2020, vol. 17, issue 2, 40-60

Abstract: This study aims to examine the effect of using capital budgeting techniques on rationalizing capital expenditure decisions, and to identify the obstacles which might limit this effect. The members of study sample are accountants who work in industrial companies which use capital budgeting techniques. Therefore, the unit of analysis is individuals, and the study uses a questionnaire method. The main result is that there is a statistically significant effect of using capital budgeting techniques on rationalizing capital expenditure decisions in industrial companies, especially when they apply those practices that consider the time value of money. Additionally, there are significant obstacles that limit the effect of using capital budgeting techniques on rationalize capital expenditure decisions, especially the subjective factor of decision-makers in accepting or rejecting investing projects, and incapability of predicting amounts and timing of projects’ cash flows.

Keywords: capital budgeting techniques; capital expenditure decisions; industrial companies; emerging market (search for similar items in EconPapers)
JEL-codes: M10 M41 M42 (search for similar items in EconPapers)
Date: 2020
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