Tag: capital budgeting
Management Accounting
Data necessary to take capital expenditure decisions The following data are to be collected in order to take the decision of capital expenditure. 1. Initial Investment: It is otherwise …
Management Accounting
Process of Capital Budgeting Capital budgeting is a complex process as it involves decisions relating to the investment of current funds for the benefits to be available in future. …
Management Accounting
Kinds of Capital Expenditure Proposals The following.are the kinds of capital expenditure proposals. 1. Independent Proposal: Independent proposal means that there is no alternative proposal to choose the best …
Management Accounting
Scope of Capital budgeting decisions Generally, the capital budgeting decisions are related to long term investments. The general scope of capital budgeting decisions are discussed briefly below. 1. Mechanization …
Management Accounting
Meaning of Capital Budgeting Capital Budgeting is the process of making investment decision in fixed assets or capital expenditure. Capital Budgeting is also known as investment, decision making, planning …
Management Accounting
Types of capital budgeting decisions Generally the business firms are confronted with three types of capital budgeting decisions. (i) The accept-reject decisions; (ii) mutually exclusive decisions; and (iii) capital …
Management Accounting
Steps involved in calculation of Present Value Factor (P.V.F) The following steps are involved in the preparation of present value 1. Cash outflows of the first year is taken …
Management Accounting
Advantages of Accounting Rate of Return Method (ARR Method) The following are the advantages of Accounting Rate of Return method. 1. It is very easy to calculate and simple …
Management Accounting
Understanding Payback Period method This method is also known as pay out, pay off or recoupment period method. Under this method, the original investment of the project should be …
Management Accounting
The following are the factors which are highly influencing Capital Expenditure decisions. Factors influencing capital expenditure decisions 1. Availability of Funds All the projects are not requiring the same …
