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Aug 22,2016
Topic : Capital Budgeting Technique
Contributor: Zulfiqar Hasan, Associate Professor (Finance)
The word Capital refers to be the total investment of a company of firm in money, tangible and intangible assets.
Capital budgeting is the process of identifying, evaluating, and implementing a firm’s investment opportunities.
Capital budgeting consists of various techniques used by managers such as:
- Payback Period.
- Discounted Payback Period.
- Net Present Value.
- Accounting Rate of Return.
- Internal Rate of Return.
- Profitability Index
- Modified Internal Rate of Return (MIRR)
- Equivalent Annual Annuity (EAA)
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