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Capital budgeting: the Romanian university professors' points of view

Victor Dragotă (), Lucian Tatu, Daniel Traian Pele (), Nicoleta Vintilă () and Andreea Semenescu ()

The Review of Finance and Banking, 2010, vol. 02, issue 2, 95-102

Abstract: This study aims at validating the points of view of the Romanian finance university professors regarding capital budgeting. The study is original and important in the same time, taking into consideration that their opinions, due to their vocation of educators, may represent the starting point for debates on the most suitable methods and techniques used in the practice of this field. It can be noticed that the dominant points of view converge to the recommendations of the main reference works in the domain of corporate finance. Hence, indicators like net present value, internal rate of return or profitability index are the most preferred. Among the techniques of risk quantification, the sensitivity analysis is considered as the most suitable, followed by the Monte Carlo method and the scenarios technique. As for the discount rate used for the investment projects analysis, the most numerous respondents recommend the weighted average cost of capital.

Date: 2010
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The Review of Finance and Banking is currently edited by Victor Dragota; Bogdan Negrea

More articles in The Review of Finance and Banking from Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante Strada Mihai Eminescu nr.13-15, sector 1, Bucuresti, Romania. Contact information at EDIRC.
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