Relation between Popular Methods of Capital Budgeting Decision Technique of Commercial Enterprise a Mathematical Approach with Simulated Projects

Sanjay Tripathi
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Sanjay Tripathi: M. K. Amin Arts and Science College & College of Commerce Padra, the Maharaja Sayajirao University of Baroda, Vadodara, Gujarat, India.

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Abstract: In Financial Management the concept of Time Value of Money play an important role which include the concepts of discounted value and future value. This study presents the technique within the Time value of money of capital budgeting. The objective of this work is to obtain a combined relationship between the capital budgeting decision technique such as Net Present Value, Internal Rate of Return, Modified Internal Rate of Return, Profitability Index, Modified Profitability index and cost of capital. The effectiveness of these relationships is discussed and finally we have considered an example to verify the correctness of our relationship by considering a stimulated project. The Modified Internal Rate of Return obtain by other authors [1-4] is same as calculated with the relationship we obtained.

Date: 2021-09-15
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Published in Asian Journal of Economics, Finance and Management , 2021, 3 (1), pp.570-576

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05188155

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